Tuesday, 3 March 2015
Last updated 1 hour ago
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.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…