‘Royalty’ Accused Of Hedge Fund Fraud

Jun 14 2010 | 12:49pm ET

A New York hedge fund manager who claimed royal ties has been arrested and charged with defrauding investors of at least $6 million.

Guy Albert de Chimay was arrested Friday in North Carolina after he was charged with grand larceny and forgery by the Manhattan district attorney. On the same day, the Securities and Exchange Commission filed a fraud lawsuit against Chimay and his Chimay Capital Management.

According to the SEC, Chimay sold investors on his “Bridge Loan Facility” by telling them he would pool their assets with millions from the princely family of Chimay in Belgium, claiming to be related to the Prince of Chimay. Chimay allegedly said the facility would make low-risk, short-term bets, guaranteeing 12% annual returns.

In fact, Chimay spent at least $6 million to pay his divorce lawyers and the mortgage on his house in the Hamptons, according to the SEC. He allegedly falsified bank statements to hide his fraud, and also lied to investors  about how much his firm managed, claiming to run $200 million. In December, Chimay allegedly sought a multi-million bank loan by claiming he had $13 million in a Bermudan bank account. According to the SEC, he had exactly $13 million less than that in the account.

“Chimay used the trappings of royalty to perpetrate the most common of frauds,” George Canellos, head of the SEC’s New York office, said. “Chimay blatantly lied to investors about non-existent investments and then used their money to bankroll his exorbitant personal and business debts.”

The SEC won an emergency freeze of Chimay’s assets and those of his firm on Friday.

In addition to the New York criminal charges and the SEC’s lawsuit, Chimay also faces at least three investor lawsuits.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…