Wednesday, 23 July 2014
Last updated 11 hours ago
Nov 6 2007 | 12:00pm ET
The principals of a New York hedge fund have been ordered to pay almost $1 million for their alleged role in a Ponzi scheme.
Alain Assemi and John Friedrich, principals of hedge fund Seaforth Meridian, will have to pay more than $913,000 combined in disgorgements and prejudgment interest, a federal judge in Kansas has ruled.
The hedge fund, which has since gone into receivership, supposedly traded A-rated fixed income bonds and corporate securities. Between May 2004 and October 2005, the firm raised $22 million from 75 investors, according to the Securities and Exchange Commission. However, the hedge fund diverted $9 million to Quantum Analytics, a Scottish firm found by British regulators to have misled investors and ignored a court-order asset freeze.
The firm also allegedly received millions of dollars from the Capital Enhancement Club, which was found by the Kansas Securities Commissioner to be a Ponzi scheme. Seaforth had agreed to return all of the money it received from CEC, but so far has given back only half of it, with the rest transferred to accounts in Switzerland and Scotland.
Friedrich and CEC founder Scott Klion—now thought to be in hiding in the Caribbean—had a longstanding financial relationship, dating back to 1999. Investigators have to date recovered just about a quarter of the claims made against CEC.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…