Sentences Come Down In Gryphon Fraud As Leader Mulls Withdrawing Plea

Sep 15 2011 | 8:52pm ET

Seventeen of the 18 people charged in a Staten Island, N.Y., boiler-room hedge fund fraud have been sentenced—but the leader of the scam may try his hand with a jury.

U.S. District Judge Jack Weinstein sentenced the other Gryphon Holdings defendants over the past two days to prison terms of between three months and two years and one month. Receiving the lightest sentence was Gryphon "mastermind" Kenneth Marsh's ex-wife, Nicole Marsh. The firm's first employee, salesman Baldwin Anderson, received two years.

But Marsh's sentencing was postponed until next week after Weinstein indicated he'd sentence Marsh to 10 years in prison.

That led to a protest from Marsh's attorney, who said after the hearing yesterday that his client might withdraw his April guilty plea.

"We are cautiously optimistic that the court will reconsider all of the proceedings, including some of the sentences he has imposed today," Alan Futerfas said. "His sentence should be proportional to some of the sentences imposed."

According to prosecutors, Gryphon lied about its assets under management, invented a relationship with George Soros and made up offices in Manhattan, London and Sydney, Australia, when it was actually run out of a Staten Island strip mall. Marsh also allegedly made up two traders.

Last month, Weinstein said he planned to sentence Marsh to about five years in prison. But the judge changed his mind after hearing from seven of Marsh's victims yesterday.

"I have now seen this crime in its full depth and what it's meant to all these people," Weinstein said.


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