New York (HedgeCo.Net) – Hedge fund manager and adviser Berton Hochfeld was sentenced to two years in prison for defrauding investors out of more than $1 million. Hochfeld pled guilty in January to securities fraud and wires fraud in connection with his hedge fund management.
The SEC in 2012 froze the assets of two of Hochfeld’s hedge funds, Hochfeld Capital and Heppelwhite. The SEC’s action charged Hochfeld and his firm with securities fraud for misappropriating assets and making material misstatements to Heppelwhite Fund investors.
The SEC says that since at least April 2011, Hochfeld misappropriated assets from the Heppelwhite Fund, a hedge fund with approximately 25 investors and at least $6 million in assets. The SEC alleges that Hochfeld misappropriated approximately $1.3 million from the Fund, some of which he used to pay for a collection of valuable antiques he purchased. Hochfeld and Hochfeld Capital made material misstatements to Fund investors, including providing them with periodic statements that overstated the value of their investments, and failing to disclose that Hochfeld is subject to the 2006 SEC Order that bars him from associating with any broker, dealer, or investment adviser.
Manhattan U.S. Attorney Preet Bharara said: “Berton Hochfeld scammed investors who trusted him out of more than $2 million and spent it in part on luxury items for himself. This office will not tolerate those who seek to bilk their investors.”
In addition to his prison term, Hochfeld, 66, of Stamford, Connecticut, was sentenced to three years of supervised release. He was also ordered to forfeit $2,110,535.84.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission for their assistance.
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