Trader/Fund Manager Faces Civil and Criminal Charges for Lying about Performance
A trader and fund manager faces both civil and criminal charges for soliciting investors by misrepresenting the performance of her trading strategy. The SEC asserts that the defendant’s active day-trading of leveraged futures and forex incurred significant trading losses over a 4-year period. However, the SEC charges that the defendant marketed the strategy to individual investors as a “low risk enterprise” and sent fake monthly account statements to support her claims. The U.S. Attorney’s Office has filed parallel criminal charges.
OUR TAKE: Lying about performance can result in more than a regulatory slap on the wrist. The regulators and the Justice Department view such misrepresentations as tantamount to using false pretenses to steal money. Such charges put you on the path to a federal correctional facility.