Beverley Hills Hedge Fund Fraudster Gets Nine Years

Mar 31 2010 | 2:32am ET

Hedge fund fraudster Michael McCready was sentenced to nine years in prison for defrauding investors of some $9 million.

The Beverly Hills, Calif., hedge fund manager pleaded guilty in October to running a Ponzi scheme for five years. He had faced up to 20 years in prison on the federal securities fraud charges.

McCready was also ordered to pay restitution to his victims, many of whom were involved in the entertainment industry.

According to prosecutors, McCready pretended to manage both a hedge fund and more traditional investments. But they say he never actually invested a dime, instead using new money to pay off old investors and spending the rest on himself and his girlfriend. Among the ventures unknowingly financed by McCready’s clients were his girlfriend’s business, a movie written and directed by the fraudster himself, and a trip to the Super Bowl. All the while, investors were kept in the dark with bogus account statements.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of