SEC Bars Hedge Fund Manager Charged in Asset Management Mismarking Scheme

(Securities & Exchange Commission) The Securities and Exchange Commission has obtained a final judgment against a hedge fund manager the agency charged with falsely inflating assets in portfolios he managed. The SEC also barred him from the securities industry. According to the SEC’s complaint, filed June 15, 2016, Stefan Lumiere and fellow hedge fund manager Christopher Plaford engaged in a fraudulent scheme to falsely inflate the value of securities held by a hedge fund advised by their firm. For an 18-month period, Lumiere and Plaford used sham broker quotes to mismark as many as 28 securities per month, surreptitiously passing their desired prices along to brokers via his personal cell phone or a flash drive delivered by a courier. The fund consequently reported artificially inflated returns and monthly net asset values, and paid out millions of dollars in inflated management and performance fees to its investment adviser.

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