New York (HedgeCo.Net) – A 26 year old hedge fund manager has been charged by the SEC for targeting veterans and military personnel as investors in a hedge fund Ponzi scheme, raising approximately $1.78 million from 24 investors.
“Cohn lured investors through his Veterans Financial Education Network, which purported to help veterans manage their money and by touting annualized returns reaching triple digits.” Reuters says.
The Chicago-based hedge fund, Marketaction Capital Management, lost every penny of the investments made as a “result of unsuccessful trading and bad investment choices,” the SEC says. Cohn has used the rest of the investors’ proceeds to support his lavish lifestyle, in order to perpetuate the carefully contrived image of a successful trader and investor.
Cohn concealed losses from his investors by lying about the fund’s performance, the SEC says, “By fabricating investor account statements; by forging brokerage statements; and by using new investor money to pay redemptions to earlier investors.”
After several investors requested redemptions simultaneously, Cohn refused to honor their requests, claiming that unspecified liquidity problems have temporarily delayed such redemptions.
The SEC seeks disgorgement and civil penalties from Cohn stemming from his violations of securities laws.
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