New York (HedgeCo.Net) – Chicago-based investment fund manager Neal V. Goyal and two hedge fund advisers that he owned and controlled –Blue Horizon Asset Management and Caldera Advisors – are being charged with violating the antifraud provisions of the Securities Act of 1933, Securities Exchange Act of 1934 and Rule 10b-5, and Investment Advisers Act of 1940.
The SEC is seeking financial penalties, disgorgement of ill-gotten gains plus prejudgment interest, and a permanent injunction against Goyal, Blue Horizon Asset Management, and Caldera Advisors.
In a parallel action, the U.S. Attorney’s Office for the Northern District of Illinois today announced criminal charges against Goyal.
“From the beginning of his scheme, Goyal lied to investors and created fake account statements portraying positive trading returns in order to gain their trust and attract additional investments,” said David Glockner, director of the SEC’s Chicago Regional Office. “Goyal’s limited trading was unsuccessful, and he stole the vast majority of the money he raised.”
According to the SEC’s complaint filed in federal court in Chicago, Goyal raised more than $11.4 million in the last several years for investments in four private funds that he managed and controlled. Goyal’s investment strategy lost money from the outset, but he hid those losses from investors through the Ponzi payments and phony account statements. Meanwhile, Goyal misused investor funds to make down-payments and pay the mortgages on two homes he purchased. He also siphoned away investor money to invest in a Chicago tavern, fund two children’s clothing boutiques that his wife operates in Chicago, and purchase artwork and lavish furniture.
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