Calif. ‘Hedge Fund Manager’ Accused Of Every Fraud In The Book

Nov 9 2006 | 11:40am ET

An Oakland, Calif., man has been accused of perpetrating just about every hedge fund scam imaginable, allegedly stealing millions from his “clients.”

The Securities and Exchange Commission has filed fraud charges against Edward Ehee, alleging, among other things, that he misappropriated investor funds, raised money for four years after shuttering his investment operations, produced phony documentation, including bogus audit statements, and ran a Ponzi scheme, to boot. Ehee’s assets, as well as those of his wife, brother, father and “investment advisory firms,” were frozen yesterday by a federal court in San Francisco.

“Ehee preyed on innocent investors, ranging from a neighbor who entrusted Ehee with his children’s money to a senior who liquidated her life savings to invest in Ehee’s funds,” Helane Morrison of the SEC’s San Francisco office said. “Today’s court action confirms the willingness of the Commission to take emergency action when necessary to protect investors.”

According to the SEC, Ehee’s Viper Founders Fund—one of three funds he allegedly used in the scam—effectively ceased operations by the end of 2002. But Ehee allegedly whipped up a batch of fake account statements and financial reports to convince new investors to give him their money, which they did as recently as May of this year. Ehee then took the money and used it for his mortgage, car and vacation payments, and of course for fattening his—and his wife’s, brother’s and father’s—bank accounts. At least, that’s what he is accused of doing with the money not used to pay off earlier investors in the Ponzi scheme.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of