Thursday, 29 January 2015
Last updated 1 hour ago
Mar 11 2011 | 12:39pm ET
The Financial Industry Regulatory Authority has expelled a defunct hedge fund and its manager for defrauding investors by overvaluing assets.
According to the regulator, MICG Investment Management and founder Jeffrey Martinovich overvalued two non-public securities owned by the MICG Venture Strategies hedge fund, using the higher valuations to overcharge investors hundreds of thousands of dollars in management fees. Martinovich and MICG also induced an elderly, non-accredited investor to invest $75,000 in the hedge fund.
"MICG and Martinovich used the proprietary hedge fund to unjustly enrich itself," FINRA enforcement chief Brad Bennett said. "This extreme abuse of trust, and their disregard for the interests of public investors, demonstrated their unfitness for participation in the industry."
Both Newport News, Va.-based MICG, which tendered its broker-dealer license and shut its doors in May of last year, and Martinovich consented to the FINRA order without admitting or denying guilt.
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…