New York (HedgeCo.net) – Two hedge fund founders, Eugenio Verzili and Arturo Rodriguez, have been sued by the SEC for misappropriating $1.8 million from one of their hedge funds, Juno Mother Earth Asset Management.
The SEC alleged in Federal court yesterday that the team mis-characterized at least 41 separate withdrawals from the Resources Fund as payment of Resources Fund’s expenses when, in fact, Defendants used the transferred cash for their own benefit.
“This action concerns defendants’ multi-faceted scheme to defraud a hedge fund under their control, as well as the investors in the fund, and the defendants’ failure to comply with their fiduciary obligations to the hedge fund,” the SEC said.
Courthouse News Services reports that: “From at least 2007 to the present, Juno, Verzili and Rodriguez: (a) misappropriated approximately $1.8 million of assets from a Juno advised hedge fund; (b) fraudulently concealed their misappropriation from the fund’s independent directors; (c) inflated and misrepresented Juno’s assets under management (‘AUM’) by approximately $40 million; (d) filed false Forms ADV with the Commission that, among other things, failed to disclose transactions between Juno and the hedge fund; (e) concealed Juno’s precarious financial condition; and (f) misrepresented the amount of capital certain Juno partners had invested in a Juno-advised fund.”
The SEC “seeks disgorgement, an injunction and penalties.”
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