SEC Charges Texas Man With Hedge Fund Fraud

Jan 21 2009 | 2:58am ET

Another day, another Ponzi scheme: The Securities and Exchange Commission yesterday sued a Texas man for allegedly defrauding investors of at least $8.5 million.

According to the SEC, Rod Stringer raised the money for his phony RCS Hedge Fund. But just $1.5 million of the money collected was actually deposited in Stringer’s account. The agency alleges in their complaint, filed in federal court in Lubbock, Texas, that Stringer used $2.4 million to pay off other investors and the rest to buy himself the finer things in life, including fancy cars, a boat, a horse-racing partnership and an office swimming pool.

Stringer, of Lamesa, Texas, allegedly told investors that the fund, which he said had $45 million in assets from 31 investors, had enjoyed phenomenal returns: Annual gains as high as 61% and total returns of more than 600%. Contrary to those grandiose claims, the SEC and Federal Bureau of Investigation say what little investing he did was a disaster, resulting in substantial losses.

The SEC has asked the court to restrain Stringer from securities law violations. It is seeking repayment of the missing money with interest, as well as civil penalties.


In Depth

Fund Manager's Disease: Common Symptoms and Proposed Remedies

May 3 2016 | 6:11pm ET

The cadre of 25 research analysts at Murano Systems speaks with more than 150 investors...

Lifestyle

Point72's Cohen Donates $275M To Veterans Mental Health Network

Apr 6 2016 | 8:31pm ET

Billionaire hedge fund manager Steve Cohen has formed a non-profit aimed at treating...

Guest Contributor

Agecroft: Why NYCERS Should Reconsider Exiting All Hedge Funds

Apr 18 2016 | 5:51pm ET

The recent decision by the New York City Employment Retirement System to exit its...