Banyon's Levin Hit With SEC Suit Over Rothstein Fraud

May 23 2012 | 3:20am ET

The Securities and Exchange Commission has sued a hedge fund manager and a partner for allegedly defrauding investors in the Scott Rothstein Ponzi scheme.

Banyon Investments' George Levin and Frank Preve raised more than $157 million from 173 investors. The money was then turned over to Rothstein as part of his $1.2 billion Ponzi scheme, which collapsed two-and-a-half years ago.

According to the SEC, Levin and Preve misled investors about the risks involved and continued to sell Rothstein's scheme even after it began to collapse, lying to investors about its success.

Rothstein himself fingered Levin during a deposition, testifying that Levin knew he was running a scam. "The Ponzi scheme really got legs when I was introduced to George Levin," Rothstein said. "Levin knew."

Levin and Preve's lawyers said their clients were "two of the biggest victims of the Rothstein Ponzi scheme" and that they were "extremely disappointed" by the SEC lawsuit.

Rothstein is serving a 50-year prison sentence for the fraud.


In Depth

Q&A: Omni Macro Fund Bullish On India, Watching China

Mar 4 2015 | 3:35pm ET

Omni Macro Fund was formed in 2007 by Stephen Rosen, previously a prop trader at...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Managing Diversification And Drawdowns In The “New Normal”

Mar 5 2015 | 2:42pm ET

In 2008-2009 diversification alone failed to provide adequate risk management for...

 

Editor's Note