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SEC To Reward Whistleblowers In Hedge Fund Fraud Case

The_Office_of_the_Whistleblower(SEC)_SymbolNew York (HedgeCo.Net) – In 2011 the SEC obtained an asset freeze against a Massachusetts hedge fund manager and his investment advisory firm. Now the SEC has said that it will award whistleblowers 15% of whatever it can collect from Andrey C. Hicks and Locust Offshore Management LLC.

Hicks was charged with misleading investors in a supposed quantitative hedge fund and diverting portions of investor money into his personal bank account, however the SEC has not been able to collect any money from Hicks as yet.

“Hicks lied to investors about virtually every aspect of his fictitious hedge fund. This brazen web of lies to investors constituted an outright fraud,” David P. Bergers, Director of the SEC’s Boston Regional Office, said.

Hicks is alleged to have raised at least $1.7 million from several investors for the hedge fund. Among the false claims made to investors were that the hedge fund manager obtained undergraduate and graduate degrees at Harvard University, and that he previously worked for Barclays Capital, and that the hedge fund held more than $1.2 billion in assets.

At the SEC’s request, Judge Richard Stearns of the U.S. District Court in Massachusetts issued a temporary restraining order that freezes the assets of Hicks, his firm, and the hedge fund.

“Hicks and Locust Offshore Management created this intricate scheme in order to gain credibility with investors,” Robert Kaplan, Co-Chief of the Asset Management Unit in the SEC’s Division of Enforcement, said. “Even hedge fund managers who claim affiliations with well-known institutions should be thoroughly researched before making an investment.”

Alex Akesson
Editor for HedgeCo.net
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