Hedgie Gets $62M Fine:
Michael Lauer, head of Lancer management Group and Lancer Management Group II, two Connecticut-based hedge funds, was ordered on May 14 to fork over $62 million within 15 days as a result of being found liable on SEC fraud charges last fall. Lauer raised more than $1 billion from investors by misrepresenting the nature of, and returns on, his investments, which ultimately lost investors more than $500 million. Lauer was criminally indicted in a Florida district court for the same conduct. His trial in that matter is set for March 2010. “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.”
10 Years In Slammer
Amit Mathur, a 38-year old Worcester, Mass., investment advisor and owner of Entrust Capital Management, was sentenced to 10 years in federal prison and fined $12.5 million for defrauding his clients. Indicted on criminal charges in September 2006, Mathur's May 2008 trial lasted two weeks before he was found guilty. During the trial, it was revealed that Mathur raised and lost millions of dollars of his clients money through undisclosed trading losses and spending on luxury cars and gambling trips to Las Vegas for him and his friends.
SEC Sacks Dallas Cowboy Advisor:
The SEC has issued an emergency asset freeze request with a Texas district court in conjunction with a fraud complaint against Micheal Kiselak, the 42-year old owner of Kiselak Capital Group and former starting center for the Dallas Cowboys. The Commission's complaint alleges Kiselak solicited $24 million from 14 investors on behalf of a California-based venture capital company, Gemstar Capital Group, by promising inflated returns and misrepresenting how investor funds would be invested. The SEC complaint also alleges Kiselak failed to disclose to investors that KCG took a 35 percent performance fee on all trading profits. The complaint alleges Kiselak told investors that his firm made a monthly 2.25 percent trading profit on U.S. Treasury bills; meanwhile, according to the SEC, Kiselak invested 95 percent of the money with Gemstar. According to the SEC, KCG and Gemstar could not account for all $24 million of investor funds. As of May 7, 2009, Gemstar could only show $19 million in its brokerage accounts.