SEC Accuses Two Of Hedge Fund Ponzi Scheme

Mar 6 2013 | 10:44am ET

Two men on opposite sides of the country are accused of running a hedge fund fraud that ensnared a member of the National Basketball Association champions Miami Heat.

According to the Securities and Exchange Commission, South Dakota's Randy Hansen and New Jersey's Vincent Puma ripped investors in the RAHFCO Hedge Funds off to the tune of $10 million. The two allegedly sent phony account statements to investors to prop up their Ponzi scheme, instead of following through on the options, futures and equities strategy promised.

"They misrepresented their trading success, they misused investor funds to make Ponzi payments to other investors, and they used investor funds for the defendants' own purposes," the lawsuit, filed in New York, alleges. Hansen stole $1.95 million and Puma $1.65 million, the SEC said.

Hansen and Puma raised more than $23.5 million from more than 100 investors, including the Heat's Mike Miller, who sued the two men last year. Miller, a South Dakota native, invested $1.7 million; his lawyer said he's recovered "a substantial portion" of the money.

Hansen and Puma are only the latest charged in the fraud. Anthony Johnson pleaded guilty to a role in the scheme last year. A RAHFO trader, Ward Onsa, pleaded guilty in another hedge fund fraud case two years ago.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of