Thursday, 31 July 2014
Last updated 1 hour ago
May 17 2011 | 10:14am ET
The Securities and Exchange Commission has sued a second hedge fund in an alleged $540 million fraud.
Highview Point Partners was formerly co-owned by Francisco Illarramendi, who pleaded guilty to running a Ponzi scheme in March. According to the SEC, Highview is holding assets tied to Illarramendi and was used by him to perpetuate his scheme.
“Illarramendi conducted the fraud using the Highview funds and” his Michael Kenwood Group hedge funds “in tandem, engaging in many related transactions between the two groups which included purported loans and extensive undocumented transfers of cash between them,” the SEC said in its amended complaint.
Highview’s assets, along with the assets of its three hedge funds, were temporarily frozen at the SEC’s request.
Illarramendi was a co-owner of Highview from 2005 through 2010. The firm is now owned by Frank Lopez and Christopher Luth, who have not been accused of any wrongdoing. Highview filed for bankruptcy on May 9, reporting as much as $500,000 in assets and as much as $500 million in liabilities.
Earlier this month, a Venezuelan accountant admitted to falsifying documents to help Illarramendi cover up the scam. According to prosecutors, Juan Carlos Guillen Zerpa and another man, who has pleaded not guilty, produced a bogus letter from an accountant in Venezuela verifying $275 million in imaginary assets. Illarramendi allegedly paid the two men more than $3 million for the letter.
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…