Three Hedge Fund Fraudsters Fined

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.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...