{"id":42721,"date":"2014-06-24T06:39:40","date_gmt":"2014-06-24T10:39:40","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=42721"},"modified":"2014-06-25T08:56:05","modified_gmt":"2014-06-25T12:56:05","slug":"florida-hedge-fund-charged-with-17-million-fraud-scheme","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/06\/2014\/florida-hedge-fund-charged-with-17-million-fraud-scheme.html","title":{"rendered":"Florida Hedge Fund Firm Charged With $17 Million Fraud Scheme"},"content":{"rendered":"<p><a href=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2010\/10\/2007311142210_pocketing_money_4.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-full wp-image-18311\" src=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2010\/10\/2007311142210_pocketing_money_4.jpg\" alt=\"hedge fund fraud\" width=\"213\" height=\"247\" \/><\/a>New York (HedgeCo.Net) &#8211; A West Palm Beach-based hedge fund advisory firm and its founder have been charged by the SEC with fraudulently shifting money from one investment to another without informing investors, the South Florida Business Journal reports.\u00a0The firm\u2019s founder and another individual later pocketed some of the transferred investor proceeds to enrich themselves.<\/p>\n<p>\u201cInvestment advisers owe their clients a fiduciary duty of utmost good faith and full disclosure about what they\u2019re doing with their money,\u201d said Eric I. Bustillo, director of the SEC\u2019s Miami Regional Office. \u201cWeston and Hallac dishonored that duty with Wellner\u2019s assistance by secretly steering investor proceeds to a third party and then pocketing some of those funds.\u201d<\/p>\n<p>The SEC alleges that Weston Capital Asset Management LLC and its founder and president Albert Hallac illegally drained more than $17 million from a hedge fund they managed and transferred the money to a consulting and investment firm known as Swartz IP Services Group Inc. The transaction went against the hedge fund\u2019s stated investment strategy and wasn\u2019t disclosed to investors, who received account statements falsely portraying that their investment was performing as well or even better than before. Weston Capital\u2019s former general counsel Keith Wellner assisted the activities.<\/p>\n<p>The SEC further alleges that out of the transferred investor proceeds, Hallac, Wellner, and Hallac\u2019s son collectively received $750,000 in payments from Swartz IP. Weston Capital and Hallac also wrongfully used $3.5 million to pay down a portion of a loan from another fund managed by the firm.<\/p>\n<p>Weston Capital, Hallac, and Wellner agreed to settle the SEC\u2019s charges along with Hallac\u2019s son Jeffrey Hallac, who is named as a relief defendant in the SEC\u2019s complaint for the purposes of recovering ill-gotten gains in his possession.<\/p>\n<p><span style=\"color: #000000;\">According to the SEC\u2019s complaint filed in U.S. District Court for the Southern District of Florida, Weston Capital managed more than a dozen unregistered hedge funds in early 2011 with combined total assets of approximately $230 million.\u00a0\u00a0<\/span><\/p>\n<p>Alex Akesson<br \/>\nEditor for\u00a0<a style=\"color: #743399;\" title=\"hedge funds\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.net<\/a><br \/>\n<a style=\"color: #743399;\" href=\"mailto:alex@hedgeco.net\">alex@hedgeco.net<\/a><br \/>\n<a style=\"color: #743399;\" title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.Net<\/a>\u00a0is a premier\u00a0<a style=\"color: #743399;\" 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 style=\"color: #743399;\" title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">HedgeCo.net<\/a>\u00a0is FREE and EASY. We also offer FREE LISTINGS for\u00a0<a style=\"color: #743399;\" title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\/\">Hedge Funds<\/a>!<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (HedgeCo.Net) &#8211; A West Palm Beach-based hedge fund advisory firm and its founder have been charged by the SEC with fraudulently shifting money from one investment to another without informing investors, the South Florida Business Journal reports.\u00a0The firm\u2019s [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,16047],"tags":[],"class_list":["post-42721","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/42721","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=42721"}],"version-history":[{"count":3,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/42721\/revisions"}],"predecessor-version":[{"id":42755,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/42721\/revisions\/42755"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=42721"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=42721"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=42721"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}