'Purported Hedge Fund' Manager Arrested

Mar 16 2012 | 7:59am ET

A northern California man was arrested Wednesday and charged with running a phony hedge fund with phony auditors, phony investment claims and even phony principals.

James Murray was charged with wire fraud and remains in custody pending a March 20 detention hearing. According to the Securities and Exchange Commission, which sued Murray alongside the criminal charges, Murray raised $4.5 million for several funds, including a "purported hedge fund," Market Neutral Trading. To keep up the ruse, he offered a "bogus audit report that embellished the financial performance of the fund."

But the audit report wasn't the only thing that was bogus: The auditing firm, according to the SEC, wasn't even an auditing firm, but "a shell company that Murray secretly created and controlled." Even Jones, Moore & Associates' name principals, Richard Jones and Joseph Moore, are made up, according to the regulator, as well as at least five other "professionals" listed on the JMA Web site, which was "paid for by a Murray-controlled entity."

The criminal charges allege that Murray defrauded a credit card processing company, using a merchant account established by the allegedly phony auditor. The scheme cost Chase Paymentech some $350,000, the complaint alleges.

If convicted, Murray faces up to 20 years in prison.


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

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.