BDO Seidman Ex-Partner Bloom to Pay $26M For Hedge Fund Fraud

Mar 4 2015 | 10:38am ET

Former BDO Seidman Partner and hedge fund owner Mark Bloom and his company, North Hills Management, have been ordered to pay $26 million in civil monetary penalties to settle U.S. Commodity Futures Trading Commission charges that he misappropriated more than $13 million in investor capital and operating a fraudulent commodity pool.

Bloom was charged with spending money destined for a commodity pool named North Hills LP, a unit of his hedge fund North Hills Management, on personal items including cars, homes and boats. The scheme operated from at least 2002 to 2009.

In addition to diverting some of the money, Bloom allegedly told investors that North Hills would invest in a diversified portfolio of hedge funds, but in fact invested in just one. He hid that investment for more than a year, and admitted that he sent investors bogus account statements and used some new investor money to pay off older ones.

In imposing the penalty, Judge John Koeltl of the U.S. District Court for the Southern District of New York said the supplemental consent order resolves the CFTC case in its entirety. 

Bloom pled guilty in 2009 to a parallel criminal securities fraud case and is still awaiting sentencing. In 2010, the court imposed a permanent injunction and permanent trading, solicitation, and registration bans against Bloom. 

 


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