Boston Man Admits To Defrauding Investors, Name Of Fund Foreshadowed A Storm

Oct 26 2006 | 7:11am ET

If you are an investor thinking about placing money in a particular hedge fund, we have a suggestion for you: Just look at the name! A suburban Boston man has admitted to defrauding 50 investors in scam involving his purported hedge fund, Groundswell Partners.

According to Merriam-Webster’s online dictionary, groundswell means “a broad deep undulation of the ocean caused by an often distant gale or seismic disturbance.” Need we say more?

Mark Conway pleaded guilty this week to 13 counts of mail and wire fraud. Judge Patti Saris entered a $5 million judgment against Conway, and U.S. Attorney Michael Sullivan is to seek an additional $5 million in restitution. Conway is to be sentenced in January, and faces up 20 years in prison and a $250,000 fine.

Between 2001 and 2005, according to the Feds, Conway’s Groundswell Partners – allegedly, a quantitative systematic hedge fund – collected some $25 million from 54 investors, telling them his fund would follow a market-timing strategy. Instead, he allegedly deviated from that strategy and lied to investors about it, creating false documents in an effort to win further investment.

When the government put a stop to Groundswell, it recovered only $14 million.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.