SEC Charges Hedge Fund Adviser and Two Executives with Fraud in Ongoing Probe

The SEC charged a former $1 billion hedge fund advisory firm and two executives with misrepresenting the safety and liquidity of the investments made by the hedge funds, and charging excessive fees to the funds based on the fraudulently inflated values of the investments. According to the press release, this is the seventh case arising from the SEC's Aberrational Performance Inquiry that uses proprietary risk analytics to identify hedge funds with suspicious returns. (In other words, the SEC looks for funds whose performance is too high to be true or, as in the case of Madoff, too consistent to be true.)

View SEC Complaint here (links externally to SEC website). See also: SEC Press Release; Other SEC Cases in the Aberrational Performance Inquiry.