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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note