Hedge Fund Manager Maiden Pleads Guilty To Fraud

May 24 2013 | 12:39pm ET

North Carolina hedge fund manager Stephen Maiden has admitted running an $8.9 million Ponzi scheme.

Maiden pleaded guilty yesterday. He struck a plea deal with federal prosecutors, who accused the Maiden Capital Opportunity Fund manager of sending clients and its administrator "bogus account statements." Maiden suffered substantial losses between 2006 and 2009, but still reported positive returns to investors. In April 2009, Maiden claimed a monthly net return of 4.9% and a 30-month net return of 47%—in fact, prosecutors said, he had lost most of the money invested with him.

Maiden also made Ponzi scheme payments to some investors, sometimes using personal funds. Maiden Capital was insolvent by July of last year; Maiden signed the plea agreement in October.

Maiden was released on bond prior to sentencing, when he faces up to 20 years in prison.


Lifestyle

Survey: Wall Street Banks Still Top Silicon Valley, Hedge Funds for Freshly-Minted MBAs

Jun 21 2016 | 9:01pm ET

Contrary to concerns that Wall Street isn't as appealing to new graduates as it...

Guest Contributor

The Future of the Blockchain in Financial Services Communications

Jun 17 2016 | 1:05pm ET

Over the past year, a large portion of the financial services industry has awakened...