Wednesday, 31 August 2016
Last updated 2 hours ago
Mar 13 2008 | 11:26am ET
Three hedge fund fraudsters have been fined for their involvement in a hedge fund scam dating back two years.
The Securities and Exchange Commission in April 2005 initially filed its complaint against father and son team Sheldon and Peter Krieger, and John Madey, principals of a hedge fund called KFSI Equity Fund, for allegedly funneling approximately $3.7 million of the $7.5 million the fund raised to a broker-dealer they also controlled.
The trio raised money from approximately 45 investors by claiming the KFSI Fund would generate profits by trading in securities. But the fund lost money and the trio hid the losses by issuing false account statements to investors.
The U.S. District Court for the Southern District of Florida has now ordered each of the Kriegers to pay a $110,000 civil penalty and Madey to pay a disgorgement of $223,094 and prejudgment interest in the amount of $48,224.