Friday, 24 October 2014
Last updated 10 hours ago
Oct 4 2011 | 2:42am ET
A former hedge fund manager who helped put his bosses in prison for a $255 million Ponzi scheme has been barred from the securities industry.
The Securities and Exchange Commission banned Amnon Cohen for continuing to manage and market high-yield debt funds for WexTrust Capital even after he learned that the firm's CEO and chief operating officer were misappropriating money and defrauding investors. Cohen consented to the order without admitting or denying the allegations.
"I wanted to get this thing behind me, and I'm glad it's over," he told the Virginian-Pilot.
WexTrust CEO Steven Byers and COO Joseph Shereshevsky pleaded guilty to running the fraud, which targeted Orthodox Jews. Cohen "provided substantial assistance" in building the cases against the two men, who were sentenced to 13 years and four months, and 21 years and 10 months, respectively.
Cohen was not accused of actively participating in the fraud. But, according to the SEC, he knew in early 2007 that Byers and Shereshevsky planned to defraud WexTrust's clients and by mid-2007 that the two were siphoning money out of his own funds to cover expenses at other WexTrust funds. But Cohen continued to manage his funds, and even assured a hedge fund that invested in WexTrust that its portfolio was sound, despite knowing that Byers and Shereshevsky were skimming from it.
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