{"id":41307,"date":"2014-03-26T07:31:08","date_gmt":"2014-03-26T11:31:08","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=41307"},"modified":"2014-03-26T07:42:25","modified_gmt":"2014-03-26T11:42:25","slug":"us-justice-department-convicts-hedge-fund-ceo-of-500-million-fraud","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/03\/2014\/us-justice-department-convicts-hedge-fund-ceo-of-500-million-fraud.html","title":{"rendered":"US Justice Department Convicts Hedge Fund CEO Of $500 Million Fraud"},"content":{"rendered":"<p><a href=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2014\/03\/DoJ.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-41316 alignright\" alt=\"DoJ\" src=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2014\/03\/DoJ.jpg\" width=\"320\" height=\"240\" srcset=\"https:\/\/hedgeco.net\/news\/wp-content\/uploads\/2014\/03\/DoJ.jpg 320w, https:\/\/hedgeco.net\/news\/wp-content\/uploads\/2014\/03\/DoJ-300x225.jpg 300w\" sizes=\"auto, (max-width: 320px) 100vw, 320px\" \/><\/a>New York (HedgeCo.Net) &#8211; The CEO of the now-bankrupt hedge fund Sentinel Management Group, Inc., was convicted today of defrauding more than 70 customers of over $500 million before the firm collapsed in August 2007.<\/p>\n<p>&#8220;The defendant, Eric Bloom, misappropriated securities belonging to customers by using them as collateral for a loan that Sentinel obtained from Bank of New York Mellon Corp., which was used, in part, to purchase millions of dollars\u2019 worth of high-risk, illiquid securities not for customers, but for a trading portfolio maintained for the benefit of Sentinel&#8217;s officers, including Bloom, members of his family, and corporations controlled by the Bloom family.&#8221; The US Justice Department said.<\/p>\n<p>A federal jury deliberated less than two hours after a four-week trial in U.S. District Court before returning guilty verdicts on 18 counts of wire fraud and one count of investment adviser fraud. The case is one of the largest financial fraud cases ever prosecuted in Federal Court in Chicago.<\/p>\n<p><span style=\"font-size: 16px;\">Sentinel\u2019s head trader, Charles K. Mosley, pleaded guilty last October to two counts of investment adviser fraud and is awaiting sentencing.<\/span><\/p>\n<p>\u201cSentinel was sinking like the Titanic,\u201d Assistant U.S. Attorney Clifford Histed told the jury in closing arguments. \u201cSentinel was not a victim of the credit crisis,\u201d he said, adding that the \u201cfinancial crisis merely exposed the fraud\u201d that had been going on for years.<\/p>\n<p>The Justice Department reports that in 2007, Bloom knew that Sentinel was approaching insolvency and that defaulting on the Bank of New York loan was a real possibility, yet he caused Sentinel to take in more than $100 million in customers\u2019 money and continued to conceal Sentinel\u2019s true financial condition from customers.<\/p>\n<p>Alex Akesson<br \/>\nEditor for\u00a0<a title=\"hedge funds\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.net<\/a><br \/>\n<a href=\"mailto:alex@hedgeco.net\">alex@hedgeco.net<\/a><br \/>\n<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.Net<\/a>\u00a0is a premier\u00a0<a title=\"hedge fund database\" href=\"http:\/\/www.hedgeco.net\/\">hedge fund database<\/a>\u00a0and community for qualified and accredited investors only. Membership in\u00a0<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.net<\/a>\u00a0is FREE and EASY. We also offer FREE LISTINGS for\u00a0<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">Hedge Funds<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (HedgeCo.Net) &#8211; The CEO of the now-bankrupt hedge fund Sentinel Management Group, Inc., was convicted today of defrauding more than 70 customers of over $500 million before the firm collapsed in August 2007. &#8220;The defendant, Eric Bloom, misappropriated [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-41307","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/41307","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=41307"}],"version-history":[{"count":4,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/41307\/revisions"}],"predecessor-version":[{"id":41317,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/41307\/revisions\/41317"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=41307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=41307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=41307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}