Spouse Charged In Hedge Fund Fraud

Sep 2 2008 | 1:28pm ET

The Securities and Exchange Commission has amended its complaint against Wextrust Capital, its principals and four affiliated Wextrust entities, to include defendant Joseph Shereshevsky's wife, Elka.

Joseph Shereshevsky and his partner, Steven Byers, were charged last month with defrauding investors of $255 million, misappropriating at least $100 million of it. Most of the victims were Orthodox Jews, a community in which Shereshevsky enjoyed prominent standing.

According to the SEC, Joseph Shereshevsky attempted to hide more than $900,000 in investor funds by placing them in accounts in his wife’s name. Elka Shereshevsky also allegedly had a "no-show" job at Wextrust and received transaction-based compensation and bonuses for sales of securities her husband made through Wextrust Securities.

The SEC’s complaint further alleges that in early August 2008, when numerous Wextrust accounts had been frozen, Joseph Shereshevsky directed his wife to open an account with a bank in Norfolk, Virginia, where he diverted at least $75,000. In addition, the court-appointed receiver has identified other accounts putatively controlled by Elka that contain more than $825,000 of her husband's assets.

One wire transfer report showing a $100,000 transfer into an account states, "per Joe's phone call," indicating Shereshevsky directed the transfer.


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Artivest Announces Funding Round Led by KKR & Co.

May 4 2015 | 9:56am ET

Artivest, a startup that provides individual investors with access to private equity...

Guest Contributor

Starting a ‘40 Act Fund Family? Don’t Forget Your Board

Apr 30 2015 | 7:18am ET

The convergence of the hedge fund and mutual fund worlds continues unabated, as...

 

Editor's Note