SEC Sues Massachusetts Man Over $1 Million Hedge Fund Fraud

Mar 19 2013 | 11:26am ET

A Massachusetts man dreamed up a phony hedge fund to steal more than $1 million from investors, the Securities and Exchange Commission alleges.

The regulator filed a lawsuit, unsealed yesterday, against Gregg Caplitz and his Insight Strategic Management, based in Wilmington, Mass. It said, beginning in 2009, Caplitz began to tell clients that he ran a hedge fund, and even told the SEC in filings that it had $100 million in assets.

The only problem, according to the SEC, was that it had no assets, and that Caplitz and his family used the $1.1 million he raised on themselves.

"Caplitz and his firm conjured up a hedge fund to lure longtime clients into investing substantial amounts of money that became nothing more than a slush fund to pay bills for others," Julie Riewe, deputy head of the SEC enforcement division's asset management unit, said.

Caplitz allegedly transferred the money raised to another employee of Insight, Rosalind Herman, as well as to her sons and another company.

The SEC is seeking restitution and unspecified damages against Caplitz and Insight.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note