SEC Effort To Expand Case Against Alleged Ga. Fraudsters Fails

Nov 26 2013 | 11:14am ET

The Securities and Exchange Commission has lost a bid to win back part of its claims against a pair of alleged hedge-fund fraudsters.

A federal judge in Atlanta earlier this month reaffirmed a 2011 decision narrowing the claims against Paul Mannion and Andrew Reckles, who ran the Palisades Master Fund and two feeder funds. The SEC has accused the two of misappropriating the funds' capital and inflating asset values.

Two years ago, the court held that in one of the SEC's claims, individual investors weren't clients, Palisades itself was the client, and therefore Mannion and Reckles were on the hook only for the increased management fees they received by allegedly overvaluing the assets. Despite the SEC's request for reconsideration, the court on Nov. 12 held that the law requires "material" misrepresentation to a client, and in the case of feeder funds, the client is the Master Fund.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of