Hedge Fund Manager Pleads Not Guilty To Fraud

Sep 13 2011 | 1:29pm ET

Accused hedge fund fraudster Anthony Klatch has pleaded not guilty to ripping investors off to the tune of $2.3 million.

Klatch, who was arrested in Florida last month, remains in custody after U.S. Magistrate Judge Katherine Nelson in Mobile, Ala., upheld his $200,000 bond. Klatch's mother said she is trying the scrape together the assets to meet that bond. Nelson also scheduled a trial in the case for November.

During the hearing, prosecutors said that Klatch still has two bank accounts in the Bahamas that are not covered by the asset freeze against him. Klatch told Nelson that he has "not been able to move those into the hands of the receiver."

Klatch, of Sugarloaf Township, Pa., and a partner are accused of misleading investors about their TASK Capital Partners, which solicited more than $2.3 million from eight investors, half of them in Alabama.

Klatch and Timothy Sullivan 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."

If convicted on all 18 counts, Klatsch faces up to 330 years in prison.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.