SEC Orders Hedge Fund Manager To Pay $62M Fine

May 8 2009 | 11:48am ET

The Securities and Exchange Commission announced today that Michael Lauer, the head of two Connecticut-based hedge funds, has been ordered to pay more than $62 million as a result of being found liable on SEC fraud charges last fall.

U.S. District Judge Kenneth Marra for the Southern District of Florida found that Lauer, head of Lancer Management Group and Lancer Management Group II, must pay more than $43.6 million to deprive him of his ill-gotten gains, and more than $18.9 million in prejudgment interest.

"This is a victory for investors and a cautionary tale for hedge fund managers who line their pockets with ill-gotten gains," said David Nelson, Director of the SEC's Miami Regional Office. "We are pleased the court agreed that the fraudulent conduct warranted this judgment."

According to the SEC's complaint in the case, Lauer raised more than $1.1 billion from investors over several years by misrepresenting the nature of and returns on his investments, and caused investors to lose approximately $500 million of that amount.

The judge's order also gives the SEC 30 days to recommend a specific penalty amount that Lauer should pay in addition to disgorgement of his ill-gotten gains. Lauer has been criminally indicted in the Southern District of Florida for the same conduct underlying the SEC's action. His trial is currently scheduled for March 2010.

RELATED ARTICLES:

Indicted Hedgie Pleads Guilty To Fraud
Lancer Founder Found Liable For Fraud
IRS To Sell Indicted Hedgie’s Greenwich Mansion


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

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.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.