Accused Hedge Fund Fraudster Broke Asset Freeze, SEC Says

Mar 21 2011 | 7:22am ET

Already in plenty of trouble with authorities, accused hedge fund fraudster Stanley Kowalewski finds himself in even more.

The head of North Carolina-based SJK Investment Management violated an asset freeze won by the Securities and Exchange Commission in January, the regulator said in a court filing Friday, seeking contempt charges. According to the SEC, Kowalewski withdrew some $200,000 from the frozen accounts after a judge ordered him not to do so.

The first $100,000 check, written out to his wife, cleared "approximately four minutes before First Citizens [Bank] froze Kowalewski's personal account," the SEC alleges. "Kowalewski endorsed the cashier's check to his wife, who apparently deposited it into another account."

The hedge fund manager two weeks later paid out $100,000 more from frozen accounts to pay the lawyers defending him in the SEC probe, which produced allegations that Kowalewski misappropriated some $16.5 million of the $65 million he raised, using much of it for personal use.

The SEC has asked that Kowalewski be ordered to explain his actions and, if those explanations are not up to snuff, he should be forced to repay the money, or even be jailed.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of