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

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of