Globe and Mail – When Mark Bloom was arrested last week in New York for allegedly bilking clients of North Hills Fund, the case marked a new low in the hedge fund world.
Not just because Mr. Bloom had allegedly stolen $13.2-million (U.S.) from investors, sent false financial statements and lied repeatedly about the fund’s holdings. What really galled prosecutors was that Mr. Bloom had secretly invested client money in a Canadian-based hedge fund and then bitterly complained to regulators when the fund manager was charged with stealing money from investors, sending false financial statements and lying about the fund’s holdings.
Then, when a court-appointed receiver recovered the bulk of the money Mr. Bloom had invested in the Canadian fund, he managed to divert most of the money to himself.
"This action demonstrates the length to which unscrupulous individuals will go to defraud investors," said Stephen Obie, acting director of enforcement of the Commodity Futures Trading Commission (CFTC), which filed charges against Mr. Bloom along with the U.S. Attorney’s Office in New York.