![\"\"](\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2010\/10\/2007311142210_pocketing_money_4.jpg\" "\\"hedge")
<\/a>The SEC’s complaint filed in U.S. District Court for the District of Minnesota alleges that hedge fund managers Bruce Pr\u00e9vost and David Harrold, along with their firms Palm Beach Capital Management LP and Palm Beach Capital Management LLC invested more than $1 billion in hedge fund assets with Petters while pocketing more than $58 million in fees.<\/p>\nPetters promised investors that their money would be used to finance the purchase of vast amounts of consumer electronics by vendors who then re-sold the merchandise to such “Big Box” retailers as Wal-Mart and Costco. In reality, the “purchase order inventory financing” business was merely a Ponzi scheme. There were no inventory transactions.<\/p>\n
Petters sold promissory notes to feeder funds like those controlled by Pr\u00e9vost, Harrold, and their firms, and Petters used some of the note proceeds to pay returns to earlier investors, diverting the rest of the cash to his own purposes.<\/p>\n
Comments from the defense were not available at the time, the SEC is seeking a permanent injunction against the hedge funds and their managers, as well as disgorgement, including interest and financial penalties, the WSJ said.<\/p>\n
Alex Akesson New York (HedgeCo.net) – The SEC has charged two Florida-based hedge fund managers and their funds with defrauding investors out of more than a billion dollars into a Ponzi scheme run by Tom Petters, Reuters reports. The SEC’s complaint filed […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16005,11,3],"tags":[],"class_list":["post-18302","post","type-post","status-publish","format-standard","hentry","category-developing-stories","category-hedge-fund-fraud","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/18302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=18302"}],"version-history":[{"count":10,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/18302\/revisions"}],"predecessor-version":[{"id":18305,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/18302\/revisions\/18305"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=18302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=18302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=18302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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