'Purported Hedge Fund' Manager Back In Jail Awaiting Trial

Apr 10 2014 | 9:57am ET

It's back to the big house for a Larkspur, California man accused of running a phony hedge fund.

James Michael Murray, who was arrested and charged with wire fraud, money laundering and aggravated identify theft in 2012, also faces Securities and Exchange Commission charges he raised $4.5 million for several funds, including a "purported hedge fund," Market Neutral Trading. To maintain the ruse, according to the SEC, he offered a "bogus audit report that embellished the financial performance of the fund."

It's the second time Murray has been returned to custody after violating the terms of his release pending trial, reports the Marin Independent Journal. Under the terms of his second release he was to reside in a San Francisco halfway house and to have no access to cellphones or the internet or trading through third parties.

Murray was found to have violated these terms by accessing the wifi network at his lawyer's office by means of a tablet computer he'd hidden in the ceiling of a small conference room. The tablet was discovered by the FBI which obtained a search warrant for the offices based on a tip from another resident of Murray's halfway house who said Murray had confided he was trading using an Interactive Brokers account.

The law firm, which was assigned to represent Murray pro bono, no longer counts him as a client.

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