New York (HedgeCo.Net) – Charlotte hedge fund manager Stephen Ewing Maiden has pleaded guilty to securities fraud for hiding investment losses that cost his victims at least $8.9 million, and was released on a $50,000 unsecured bond until sentencing.
“U.S. Magistrate Judge David Keesler called the alleged losses “shocking” before doubling the prosecutor’s bond recommendation and requiring Maiden to turn in his passport.” The Charlotte Observer reported.
Maiden used personal funds as well as funds from other investors to cover investor withdrawals, he has agreed to plead guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison and up to a $250,000.
Maiden launched the fund in 2006 with investments from individuals in Charlotte and elsewhere, according to court documents.
“It appears the fund suffered some of its first losses as a function of the overall recent market decline, and then, in an effort to try and offset these losses, Steve made a series of investments in increasingly risky and ill-advised ventures,” prosecution attorney Gary Mauney told the Observer this week. “Rather than go to his investors and advise them of the losses, Steve continued to report gains in the fund.”
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