Thursday, 26 May 2016
Last updated 47 min ago
Jun 23 2014 | 4:46am ET
Hedge fund KGW Capital Management’s former CFO has settled charges that he helped the firm’s founder to defraud investors of $7.4 million.
Steven McCraw did not admit or deny wrongdoing. He agreed to disgorge the $111,800 he earned as an executive of a company owned by KGW chief Kevin White—who was convicted of using KGW funds to cover business expenses unrelated to the hedge fund, among other misrepresentations to investors.
McCraw’s disgorgement will be offset by an earlier deal he made with the Securities and Exchange Commission, as part of its case against White, that amounted to $71,000. He still faces a court-determined civil penalty in that case.
The latest settlement was recommended by a federal magistrate judge in Texas this week.
“McCraw’s entire” salary at Meridian Propane “was paid with investor monies transferred from the fund to Meridian,” the SEC alleged. The regulator has also accused McCraw of inventing performance figures for a non-existent fund and of lying to investors.