Hedge Fund Manager Accused Of Making Up Client

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.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...