Thursday, 26 May 2016
Last updated 2 hours ago
Mar 18 2009 | 3:17am ET
A hedge fund manager has been accused of inventing a billion-dollar client in a bid to attract new investors.
Leila Jenkins of Locke Capital Management allegedly told investors she managed $1.2 billion; during a Securities and Exchange Commission examination of the firm last year, she told the regulator that most of the money came from a Swiss client who had contacted her via the free e-mail service Hotmail.
According to the SEC complaint, filed in Rhode Island federal court last week, the Swiss client never existed. It said Jenkins made the client up to falsely boost the assets she reported to potential clients, including institutional investors with minimum assets under management requirements.
“This brazen web of lies to investors constituted a serious breach of fiduciary duty,” David Bergers of the SEC’s Boston office said. The complaint alleges that Jenkin’s lies go back as far as 2003, and successfully attracted a pair of European banks as investors last year.
Locke Capital has vowed to fight the allegations.