Thursday, 31 July 2014
Last updated 7 hours ago
Aug 8 2011 | 11:23am ET
The mother of accused hedge fund fraudster Anthony Klatch says her son is not to blame for allegedly defrauding investors of more than $2.3 million.
Charmaine Maynard, who flew to Tampa, Fla., last week to be with her son, who is facing extradition to Alabama, told the Wilkes-Barre (Pa.) Times Leader that Klatch's bipolar disorder is responsible.
Maynard, who said that bipolar disorder runs in the family, tried and failed to get her son to seek help when she first noticed his symptoms three years ago, she said. Maynard testified as to her diagnosis at his detention hearing last week, where she said he finally acknowledged he had a problem.
Klatch and his partner, Timothy Sullivan, are accused of lying to investors in their TASK Capital Partners. The duo allegedly told investors that the fund, which they founded in 2009, had already been in business for 12 years. Their prospectuses were also filled with other "material misrepresentations and material misleading omissions," the indictment alleges.
According to prosecutors, Klatch and Sullivan, who each invested a whole $1 in TASK, invested only about 60% of the money they raised by the end of 2009, losing everything on a handful of spectacularly bad investments, at least two of which posted big losses in just minutes. The rest of the money was used to "pay off the angry investors" or simply funneled into Klatch's "personal bank account," prosecutors say.
Rather than coming clean, in January 2010 Klatch and Sullivan told investors that "their entire investment had been lost in a single trade."
Maynard said she was shocked by what she found at her son's condominium in Florida, noting that bipolar disorder can case delusions of grandeur.
"When I came down, it's like Bernie Madoff lived here," she said. Prosecutors are seeking the forfeiture of several luxury vehicles, including a Ferrari, an Aston Martin and a BMW, as well as a boat, all purchased by the 27-year-old over the past four years.
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…