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Hedge Fund Fraud

One of the lesser known types of white collar crime is known as hedge fund fraud. Hedge funds are private investment partnerships that can invest in bonds, options, commodities, real estate, and equities. Hedge funds have become extremely popular over the last two decades and are estimated to account for between 20 and 50 percent of the daily trading value on the stock exchange. However, because hedge funds do not have any centralized reporting requirements and are generally subject to little regulation, hedge fund managers are often unfairly accused of fraud, which can have devastating consequences for the individual in question, so if you are being investigated for hedge fund-related fraud, you should consider retaining an experienced white collar crime attorney who can start working on your behalf.

Hedge Fund Basics

Because of the wide range of areas in which hedge fund managers are permitted to invest, these partnerships tend to profit even in times of market volatility. Unfortunately, the volume of assets under hedge fund management also draws increased attention when these types of investments fail. Although hedge funds, like any type of investment vehicle, can fail for a variety of different reasons, ranging from poor returns on investments to capital depletion, failure is often attributed to fraud by hedge fund managers.

Types of Fraud

Some of the most common allegations made against hedge fund managers accused of fraud are that they:

  • Issued false financial documents to investors to hide trading losses;
  • Made false claims to prospective clients;
  • Were involved in insider trading;
  • Solicited foreign clients without authorization;
  • Siphoned off investment funds for personal use;
  • Exaggerated the value of investments;
  • Concealed cash flow problems;
  • Used fraudulent offering documents;
  • Diverted proceeds to preferred equity stockholders;
  • Paid some clients ahead of others; and
  • Rigged bond votes.

Those who are accused of these types of activities can be charged with a number of different federal crimes, including securities fraud, conspiracy, investment adviser fraud, and wire fraud, all of which are punishable by up to 20 years in prison. These types of allegations are investigated and prosecuted aggressively by a task force made up of more than 20 federal agencies, 94 U.S. Attorneys’ offices, as well as state and local partners. In fact, this task force is the largest coalition of law enforcement, regulatory, and investigatory agencies assembled to combat fraud. Since 2009, the Justice Department has filed more than 18,000 fraud cases against as many as 25,000 defendants.

With so much at stake for those accused of hedge fund fraud, it is critical for defendants to speak with a white collar crime attorney who has the experience and resources necessary to mounting an aggressive defense on their behalf.

Call Today to Discuss Your Case with a Florida White Collar Crime Attorney

At Jeffrey S. Weiner, P.A., Criminal Defense Attorneys in Miami, we understand the emotional and financial toll that these types of cases can take on our clients and so dedicate ourselves to aggressively defending their rights, both in and out of court. To learn more about how we can help, please call (305) 670-9919 today.

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