Thursday, 5 March 2015
Last updated 1 hour ago
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.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…