Wednesday, 26 October 2016
Last updated 16 hours ago
Nov 9 2010 | 10:34am ET
Beware of claims of easy money: A hedge fund with a facile name has been accused of defrauding investors of more than $2 million.
The Securities and Exchange Commission has sued Los Angeles-based Easy Equity Management and its principals, alleging that they lied to investors while stealing more than half of the money they raised. Alero Odell Mack and Steven Enrico Lopez both overstated Easy Equity's returns and lied about Mack's access to the New York Stock Exchange trading floor to raise some $4 million from 25 investors, the regulator said.
Easy Equity's marketing material claimed a 70% return that the SEC says never happened. Another brochure boasted of "staggering returns time and time again."
Indeed, the SEC says, the returns were good: for Mack and Lopez and the clients they paid referral fees. Only $1.3 million of the money raised was invested, according to the lawsuit, while more than $1 million was split between the two for personal expenses.
The lawsuit seeks restitution of ill-gotten gains and penalties.