SEC Accuses Two Of Hedge Fund Ponzi Scheme

Mar 6 2013 | 9:44am 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: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.