Hedge Fund Manager Accused Of $3.5M Fraud

Jan 19 2011 | 5:03am ET

A Chicago hedge fund manager has been arrested and charged with defrauding investors of more than $3.5 million.

According to the Federal Bureau of Investigation, James Brandolino ripped off about 48 high-net worth investors. For a time, his commodity trading made money—a lot of money. His Falcon Stock Index fund returned 15.5% from mid-2007 through July 2008. But on either side of that halcyon year for the commodity pool were only lies, according to the criminal complaint against Brandolino.

From 2003 to 2007, Brandolino lost most of the $1.5 million he raised, but sent investors bogus account statements showing steady returns, according to prosecutors. And after his year of good fortune, he abruptly closed the Falcon fund—but allegedly didn’t tell investors and didn’t return their money.

Prosecutors said Brandolino returned about $1.1 million of the money raised in the form of redemptions. The rest were split between investment losses and lavish spending on himself, including a luxury car and interest in an unbuilt condominium in Greece.

Brandolina was charged with mail fraud in Chicago federal court after turning himself in yesterday. He is being held in custody, facing up to 20 years in prison.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.