Calif. Hedge Fund Rapped For Misleading Investors

Nov 11 2011 | 12:04pm ET

A California hedge fund manager is accused of ripping off investors in two separate scams.

The Securities and Exchange Commission yesterday sued Del Mar-based Western Pacific Capital Management and its president, Kevin O'Rourke. According to the complaint, the two lied to investors about the liquidity of Western Pacific's hedge fund, The Lighthouse Fund, as well as pushing investors into a stock offering on which it received undisclosed commissions.

Between 2005 and 2008, O'Rourke and Western Pacific allegedly told investors in Lighthouse that only a quarter of its assets were illiquid. In fact, according to the SEC, the figure was closer to 90%. What's more, the $75 million firm improperly favored one investor's redemption request over another.

O'Rourke and Western Pacific are also accused of flogging a stock sale by Ameranth Inc. to clients without telling them that it was in line for a 10% "success fee." Western Pacific earned some $450,495 in commissions on investments made by its clients.


In Depth

Steinbrugge: Will Hedge Funds Help or Hurt During the Next Market Correction?

Sep 7 2016 | 11:55pm ET

Most investors have become accustomed to quick rebounds when markets correct, but...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...