Galvin tackles three hedge funds

Secretary of State William Galvin kept up his assault on the securities industry yesterday by filing civil complaints against the top managers of three hedge funds he said were preying onunsophisticated investors.

The complaints – lodged against managers at Hercules Hedgehog Fund, of Worcester; the Dhunn-Carr Hedge Fund, of Boston; and Futonix Futures Funds, of Reston, Va. – allege the companies offered fraudulently worded documents and employed unregistered or inexperienced advisers.

In the case of Hercules Hedgehog Fund, Galvin’s office said, the offering document failed to disclose top managers’ “minimal qualifications or even the fact they were concentrating in tech stocks.”

One Massachusetts investor made a $100,000 investment in the Hercules fund “when it was incurring dramatic losses,” Galvin said. The fund ultimately lost “well over” 90 percent of its value.

Meanwhile, the founder of the Futronix Futures Fund hooked up with a broker at a Boston area firm to pitch futures transactions, which were not approved by the broker’s firm and therefore were “unregistered activity in violation of the Securities Act,” Galvin’s office said. The broker, who wasn’t named in the complaint, remains under investigation.

Galvin is seeking to have investments returned, and also is looking to levy fines, issue cease-and-desist orders and revoke the licenses of the fund promoters.

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