Real Estate Hedge Fund A Fraud, Mass. Says

May 22 2008 | 2:00am ET

It’s been a busy week for William Galvin: The Massachusetts secretary of the commonwealth has charged a second hedge fund manager with wrongdoing, this time alleging outright fraud.

Galvin’s office has charged Stephen Lewis Hochberg with defrauding investors of as much as $1.6 million in a phony real estate hedge fund. Earlier this week, Galvin charged another Massachusetts man with soliciting improper investors.

According to investigators, Hochberg sold investors a pack of lies, promising returns in excess of 8% annually in his Realty Funding hedge fund. He also claimed the fund managed about $8.6 million.

In fact, Galvin said, Realty Funding does not appear to have “existed as an entity separate and distinct from Hochberg himself.”

“Hochberg apparently used these funds to pay for personal expenses,” Galvin said.

Hochberg allegedly didn’t spend it all on himself: Investigators say Realty Funding/Hochberg was something of a Ponzi scheme, as well, enticing clients to invest more with payouts of phony profits, as well as to settle with at least one investor who threatened to sue.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR