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A federal judge in Miami has found that former hedge fund manager Michael Lauer defrauded investors out of more than $500 million between 1999 and 2002.
U.S. District Court Judge Kenneth A. Marra, in a 67-page order issued last week, found that Lauer manipulated the prices of seven securities that were a large part of the funds’ portfolios, but failed to provide any basis for the exorbitant valuations and lied to investors about the hedge funds actual holdings.
The judge said in his order that Lauer’s actions, as head of Lancer Management Group and Lancer Management Group II, were "egregious, pervasive, premeditated and resulted in the loss of hundreds of millions of dollars in investors’ funds."
Forbes – A federal judge in Florida ruled Wednesday that the head of two hedge funds deceived investors about the funds’ holdings. Elsewhere, federal regulators accused a California investment adviser of making tainted recommendations to clients.
In the Florida case, U.S. District Judge Kenneth Marra ruled that Michael Lauer, the head of Connecticut-based hedge funds Lancer Management Group and Lancer Management Group II, engaged in a fraud that cost investors about $500 million, according to the Securities and Exchange Commission.
Marra granted the SEC’s request for summary judgment against Lauer, finding that he overstated the hedge funds’ values from 1999 to 2002, manipulated the prices of seven securities that were an important part of the portfolios, and deceived investors about the funds’ holdings by providing them with fake financial statements.
Times Online – The fashionable investment tactic of the past month – buying bank stocks while selling energy companies – could already have gone too far, Merrill Lynch, the financial management group, warned clients yesterday.
In mid-July, hedge funds, pension funds and other institutional investors dramatically reversed their enthusiasm for energy stocks and loathing for financials in an abrupt about-turn that sent bank shares soaring and oil and gas companies sinking.
But Merrill said yesterday that the unwinding of the classic bet of the credit crunch may already have been overdone, giving warning that banks across Europe could still be forced to raise between $70 billion (£37 billion) and $120 billion in new equity on top of the $120 billion already raised. Barclays and HBOS looked most vulnerable among UK banks to having to go back to their shareholders for more equity on top of the £4.5 billion and £4 billion, respectively, already raised.
