CBS News – Here’s a switch: a dozen hedge funds are accusing a California businessman of "playing dirty" with their money and even the name Sarah Palin is a "player" in the defendant’s prior ventures, according to the New York Daily News.

The suit alleges Milton Ault the 3rd stiffed the hedge funds out of their $4.2 million investment in Ault’s firm, Zealous Inc., by shoveling the money into porn, including a publicly traded gentleman’s club and a planned swingers ranch in New York’s Catskill Mountains, according to the paper.

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Pittsburgh Post-Gazette – The family of a Cambria County manufacturer has filed a lawsuit claiming that a New York hedge-fund manager illegally took $750,000 from its trust fund.

The lawsuit, filed by the family of Frank Calandra Jr., was moved to federal court yesterday. It names as defendants Signature Bank Corp. and Cushner & Garvey LLP.

The man the family accuses of taking its money, Edward T. Stein, is not a named defendant.

Mr. Stein was charged with securities fraud in federal court in Manhattan in April. According to the Securities and Exchange Commission, Mr. Stein operated a Ponzi scheme involving some $55 million collected from investors.

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UPDATE: HedgeCo.net (West Palm Beach) – Najy N. Nasser, Chief Investment Officer of the Bahamas/UK based hedge funds, Headstart Advisers Limited (HAL) and Headstart Fund, has agreed with the SEC to pay $17.8 million in a settlement regarding a 2003 alleged late trading scheme.

Without admitting or denying the allegations, the civil settlement includes payments of $17 million by the defunct Headstart Fund Ltd (domiciled in the Bahamas), $200,000 by Headstart Advisers Ltd and $600,000 by Mr Najy Nasser, the Chief Investment Officer. This settlement will conclude the case brought by the SEC against Headstart Fund Ltd, Headstart Advisers Ltd and Mr Najy Nasser arising from Headstart’s historic market-timing strategy.

The Commission’s Complaint alleged that the Bahamas hedge fund, Headstart, acting through its United Kingdom investment adviser, HAL, engaged in fraudulent late trading and deceptive market timing of U.S. mutual funds through accounts at U.S. broker-dealers. Headstart has since September 2003 focused its business on other successful strategies.

Nasser said in response to the settlement, “Headstart is very pleased to have reached a settlement.  We responded to US concerns about market timing and immediately ceased this element of Headstart’s business in September 2003.  We have since worked hard to build up Headstart’s funds using different strategies. As we equalled or bettered our overall returns against our benchmark, we are especially pleased with what we have achieved.

"We have superb long-term performance against both the market and our peer group and have some interesting plans to grow Headstart’s investment business,” he concluded.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

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