N.Y. Hedge Fund Manager Pleads Guilty

Jul 29 2013 | 9:41am ET

An upstate New York hedge fund manager has pleaded guilty to ripping investors off to the tune of $12.6 million.

Lloyd Barriger admitted that he misled new investors in his Gaffken & Barriger hedge fund after it had collapsed, the victim of a series of failed real-estate loans. Rather than admit his failures, Barriger continued to sell the fund as safe and liquid and promised 8% annual returns, even as it defaulted on a $20 million credit line and delinquencies in its portfolio increased.

"Once again, belief in hedge funds by hopeful investors proved to be sadly misplaced," Preet Bharara, the U.S. Attorney in Manhattan, said. "In this case, the perpetrator was not in a sleek Manhattan building but rather in Sullivan County."

Barriger's firm was based in the town of Monticello, about 90 miles northwest of New York City.

Barriger, who lives in Damascus, Pa., was indicted on securities fraud, mail fraud and conspiracy charges in February. He pleaded guilty in White Plains, N.Y., federal court on Friday, and faces up to 65 years in prison when he is sentenced Nov. 15. Prosecutors also plan to seek $12.6 million in forfeitures.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

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

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of