Sunday, 31 August 2014
Last updated 1 day ago
Mar 5 2008 | 1:00am ET
A Utah hedge fund firm and its trio of principals have been charged with defrauding investors of $60 million.
The Securities and Exchange Commission said that Salt Lake City-based Thompson Consulting misled investors about the nature of its investments and misappropriated funds. The regulator also charged principals Kyle Thompson, David Condie and Sherman Warner, alleging that each made sales pitches to potential investors, including many elderly.
According to the SEC, Thompson Consulting in March of last year began to ratchet up the risk in its portfolio—without informing investors—as it struggled to meet its promised 36% annual return. But its efforts only made matters worse: The firm wrote options on New Century Financial Corp. stock, only to see New Century’s share price collapse amid the subprime squeeze. Thompson Consulting then poured what was left of its assets into unhedged options on the Chicago Board Options Exchange’s volatility index just in time for the market collapse in August.
The fund lost more than $50 million in the first two-and-a-half weeks of August, leaving it with just $200,000.
The SEC also alleges that Thompson Consulting transferred $3 million of the hedge fund’s assets to an individual client’s account, to cover up losses suffered on the New Century options.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...