New York (HedgeCo.net) -The SEC has charged two San Francisco-based hedge fund adviser firms along with their former CEO, former general counsel, and former portfolio manager with defrauding investors in a $100 million hedge fund that invested in subprime automobile loans.
The SEC alleges that former CEO Benjamin P. Chui and former portfolio manager Triffany Mok, managers of the American Pegasus Auto Loan Fund, as well as former general counsel Charles E. Hall, Jr., engaged in improper self-dealing, misused client assets, and failed to disclose conflicts of interest.
“Fund advisers have a duty to disclose conflicts of interest and act in the best interests of clients whose assets they are entrusted to manage,” said Marc Fagel, Director of the SEC’s San Francisco Regional Office. “Instead, Chui, Hall, and Mok created a tangled financial web, using investor funds for their personal benefit and then attempting to paper over the misconduct by inflating the value of fund assets.”
Without admitting or denying the charges, the defendants settled the charges by agreeing pay more than $1 million in penalties and repayments to the fund. Chui, who lives in San Carlos, Calif., agreed to pay a $175,000 penalty and Hall, who lives in Carlisle, Penn., agreed to pay a $100,000 penalty and be barred from associating with an investment adviser for three years and from appearing or practicing before the Commission as an attorney for three years. Mok, who lives in Fremont, Calif., agreed to pay a $75,000 penalty and be suspended from associating with an investment adviser for one year. The two adviser firms must disgorge $850,000 in management fees deemed improper by the SEC.
Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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