Colo. Hedge Fund Manager Accused Of Fraud

Sep 14 2010 | 5:44am ET

Colorado regulators have accused hedge fund manager Mark Yost of defrauding investors of $25 million.

The state’s Securities Division sued Yost and his Yost Co., alleging that he spent client funds on himself and lied about his Yost Partnership fund’s returns. A federal judge in Denver has frozen Yost’s assets and those of his firm, and imposed a temporary ban on securities trading.

“He misrepresented to investors the amount in the fund and their returns, thereby lulling them into thinking their funds were safe and secure and making money,” Gerald Rome, deputy securities commissioner, said.

According to the lawsuit, Yost inflated the value of both the fund and its returns in order to reap larger fees. He allegedly didn’t stop there, using investor money outright on personal expenses, including paying the insurance premiums on his airplane. Yost also allegedly used his post as chairman of Flatirons Bank to run something of a Ponzi scheme to repay several investors who sought to redeem their investments.

“This was an isolated incident that does not affect any existing customer loans or deposits,” Flatirons President Kyle Heckman said. “It appears that Mr. Yost's actions were driven by his activities in other investment partnerships and were otherwise unrelated to the business of Flatirons Bank.”

According to Colorado, some 50 investors, many from Yost’s hometown of Fremont, Neb., lost $25 million.


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note