New York (HedgeCo.Net) – Pennsylvania hedge fund manager Lloyd Barringer pled guilty over the weekend to four counts of fraud: securities fraud, conspiracy to commit securities fraud, mail fraud, and conspiracy to commit mail fraud.
The charges stem from his operation of the Gaffken & Barriger Fund LLC, which was based in Monticello, Sullivan County, New York. Barriger was the president of the hedge fund and the principal shareholder, director, and officer of G&B Partners, Inc., the fund’s managing member and sole common shareholder. He surrendered to the FBI in May 2011.
“Once again, belief in hedge funds by hopeful investors proved to be sadly misplaced,” Attorney Preet Bharara said, “Investors entrusted their hard-earned dollars to Lloyd Barringer, believing his promises that their savings would be safe and secure in his fund. But, as we have alleged, they were sorely mistaken. Even as problems with the fund multiplied, Barriger allegedly continued to lure investors in with his misinformation.”
Barringer raised approximately $12.6 million while lying to investors about the fund’s financial condition, according to federal prosecutors. They will seek the whole amount in forfeited assets.
The hedge fund manager faces a maximum sentence of 20 years in prison on each count. He also faces on the securities fraud count a fine of the greater of $5 million or twice the gross gain or gross loss from the offense, and on the mail fraud count a fine of the greater of $250,000 or twice the gross gain or gross loss from the offense.
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