Bay Area "Hedge Fund" Charged With Fraud

 Founder of "purported hedge fund" Market Neutral Trading LLC Charged by SEC with Fraud.

James Michael Murray, a Bay Area "hedge fund manager" operating Market Neutral Trading LLC has been charged by the SEC with defrauding investors. According to the SEC, James Michael Murray used an "independent auditor" that was in fact merely a shell company he created. 

Murray, a Larkspur, California native, also reportedly invented fictional professionals on the "audit" company website. On wednesday, The U.S. Attorney’s Office for the Northern District of California also filed criminal charges against James Michael Murray. It's not clear if Market Neutral Trading LLC, based in San Francisco, actually conducted legitimate trading.

 Market Neutral Trading is based at 580 California Street 12th Floor, San Francisco, Ca 94104

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SEC Uses Risk Analystics to Charge Hedge Funds

The SEC has announced several lawsuits against hedge fund managers including LeadDog Capital Markets, Solaris Management, and Millennium Global Investments.

According to the SEC enforcement chief Robert Khuzami, these civil charges are a result of using " risk analytics and unconventional methods to help achieve the holy grail of securities law enforcement—early detection and prevention. This approach, especially in the absence of a tip or complaint, minimizes both the number of victims and the amount of loss while increasing the chance of recovering funds and charging the perpetrators."


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Long Island Hedge Fund Subpoenaed by SEC

NIR Group, the Long Island hedge fund firm run by Corey Ribotsky, 38, is the focus of an SEC investigation focusing on the performance valuations of its hedge funds. Also under investigation are communications NIR made to investors.

The SEC has said that Mr. Ribotsky also lied about the returns and the holding of an assortment of funds. People familiar with the matter said Corey Ribotsky and NIR Group have defrauded their investors, after poor performance over recent months.

The SEC also requested that NIR provide yearly, monthly and quarterly fund performance returns from January 2004 till the present and all documents related to NIR's internal performance calculation process.

NIR Group was founded by Mr. Ribotsky in 1998 and focuses on small/micro cap companies.

You can go to Corey Ribotsky's personal website here.

Or visit NIR Group

Manhattan Lawyer Pleads Guilty to Hedge Fund Fraud

Marc Dreier, 59, has plead guilty to using fake documents and impersonations to defraud hedge funds out of about $400 million. Despite the objections of prosecutors, Dreier was allowed to remain free on bail until his July 13 sentencing.

Dreier had founded Dreier LLC, a law firm employing as many as 250. He also lived a lavish lifestyle including a personal yacht and tens of millions in artwork.

Read the full article here

Hedge Fund Manager Fined and Banned for Mismarking Positions

UK Hedge Fund Manager Fined and Banned by Financial Services Authority for Mismarking Positions
The U.K.'s financial regulator Wednesday said it had banned and fined hedge fund manager, Loic Montserret of BlueCrest Capital Management, for mismarking trading positions as he tried to hide losses and keep his job. Monteserret is the first individual to be both banned and fined for mismarking trade positions by the Financial Services Authority. At one point, his mismarking resulted in the fund being overvalued by $8.6 million.

Montserret was banned from the securities industry for 15 years and fined GBP35,000.

Monteserret, manager of the BlueCrest Multi Strategy Credit Fund, was responsible for managing about $60 million of BlueCrest Capital Management's $12 billion in assets under management and is one of the UK's largest hedge funds.

Loic Albert Antoine Montserrat, now a former hedge fund manager manager at BlueCrest Capital Management Ltd., is the first individual to be both banned and fined for mismarking trade positions by the Financial Services Authority.

Will Hedge Fund Frauds Help Mutual Funds?

With a number of high profile hedge fund frauds, most notably the downfall of Bernard Madoff's fund, will investor's begin to shift assets from lightly regulated hedge funds to the more regulated mutual fund industry?

According to Stephan Kunze of Deutsche Bank, "there'll be a drive clearly toward more transparency and stricter supervision. That could be good for mutual funds."

Over the last several years, a class of mutual funds have developed that in many ways mimic hedge funds. Will niche and high turnonver mutual funds attract assets from the hedge fund industry? Maybe so, particularly until the hedge fund industry can regain the trust of their potential clients.