New York (HedgeCo.net) – The SEC has filed a federal case against hedge fund advisor Stephen X. Kim and Spyglass Management, L.P. for their roles in allegedly defrauding Spyglass Capital Partners, L.P., a hedge fund managed by Kim through Spyglass, according to court filings.
The SEC complaint, filed in Texas, alleges that between in 2004 and 2006, Kim and Spyglass raised approximately $4.7 million from investors located primarily in Houston, Texas using offering materials that contained misleading information relating to Kim’s education, business experience, and compensation.
The SEC alleges that Kim and Spyglass failed to employ any hedging strategy to manage risk, causing the hedge fund to loose over $2 million then directing the hedge fund to make approximately $1.7 million in Ponzi payments to investors.
Finally, the SEC alleges that Kim misappropriated approximately $1.5 million of the hedge fund’s remaining assets to repay several outstanding personal obligations.
Without admitting or denying the allegations, Kim and Spyglass made a settlement with the SEC, pending the approval of the United States District Court for the Southern District of Texas.
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