Thursday, 25 December 2014
Last updated 21 hours ago
Mar 20 2009 | 2:05am ET
Convicted hedge fund Ponzi schemer Bret Grebow has been sentenced to four years in prison for defrauding investors of almost $8 million.
Grebow, co-founder of Montvale, N.J.-based hedge fund HMC International, pleaded guilty last year to investment adviser fraud. He swindled investors of $7.8 million, according to prosecutors, before HMC collapsed in September 2005.
“Grebow operated HMC as a classic Ponzi scheme, using new investor funds to pay distributions and redemptions to existing investors,” prosecutors charged.
Grebow had faced up to five years in prison. In addition to his spell in prison, U.S. District Judge Barbara Jones ordered Grebow to forfeit the $7.8 million he stole. He is to report to prison on June 22.
According to prosecutors, HMC told investors it engaged in “momentum trading,” earning returns of as much as 70%. In fact, prosecutors allege, there were no returns at all, as Grebow, the firm’s sole “trader,” didn’t invest the money.
Grebow and his HMC co-founder, Robert Massimi, settled SEC charges two years ago. They agreed to pay $4.6 million to settle the charges that they lied to 80 investors, from whom they collected $12.9 million. The SEC said the two men misappropriated more than $5 million of investor money, with Grebow buying himself a Lamborghini Gallardo, among other luxuries.
Massimi was not charged criminally in the scam.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.