Sunday, 1 March 2015
Last updated 2 days ago
Dec 22 2010 | 11:38am ET
The Securities and Exchange Commission has sued seven people for defrauding investors of some $34 million.
The four managing members of two hedge funds, and three principals of those funds’ investment adviser, have been accused of misleading investors about those funds’ strategy and of making at least $6 million in Ponzi scheme payments. The Arcanum Equity Fund, Vestium Equity Fund and Imperium Investment Advisors lost at least $8.1 million on illiquid investments and loans to affiliates.
One of the seven charges, Richard Mittasch of Long Island, is also accused of losing $6 million raised from another 60 investors for his Triton Capital Partners in the $413 million Ponzi scheme run by Nicholas Cosmo.
According to the SEC, the Imperium scam ran for two years from April 2008. The firm and its principals and fund managers allegedly assured investors they would put their money into conservative fixed-income and commodities strategies. Instead, they are accused of gambling on private investments, paying themselves more than $1.3 million for the trouble “based on inflated asset values and fictitious profits.”
One of the seven has already settled the charges, agreeing to pay more than $1.3 million, while another of the defendants has partially settled.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…