Wednesday, 23 July 2014
Last updated 18 min ago
Oct 15 2012 | 10:35am ET
MICG Investment Management and founder Jeffrey Martinovich, of Norfolk, Virginia, appeared in court Friday on fraud charges related to the management of his Newport News-based hedge fund.
Martinovich was indicted Wednesday on 26 charges including mail fraud, wire fraud, unlawful monetary transactions and bankruptcy fraud, according to a news release from the U.S. Attorney's Office in the Eastern District of Virginia. He faces a maximum penalty of 20 years in prison for each count if convicted.
Martinovich is accused of having over-valued a non-public security owned by his MICG Venture Strategies hedge fund, then using the higher valuation to overcharge investors hundreds of thousands of dollars in management fees.
The indictment alleges that in both 2007 and 2008, the value of a solar energy company in which the fund had invested was fraudulently inflated to indicate an increase in the overall value of the hedge fund.
According to the indictment, as reported in the Norfolk Pilot, the solar company went bankrupt in February 2010, MICG closed up shop in May that year and Martinovich surrendered his broker's license.
Martinovich and his fund were the targets of litigation by investors looking to recover their money. He filed for bankruptcy in 2011 but, according to the indictment, failed to report thousands of dollars in gambling winnings and losses during those proceedings.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…