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: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note