Glenn Manterfield was finally arrested. The SEC in Boston has charged him for defrauding another group of investors. See report from the Boston Globe.
Securities regulators sued a Boston hedge fund and two principals, alleging they misled investors about the risk of a $33 million scheme involving fraudulent life insurance policies.
In a complaint filed late Thursday, the Securities and Exchange Commission charged fund manager Lydia Capital sold shares in a hedge fund to clients without disclosing that their investment process could eventually render their hedge fund's assets "either worthless or virtually worthless, " the agency stated.
In all the hedge fund called Lydia Capital Alternative Investment Fund LP raised $33 million from at least 57 investors in Taiwan, according to the SEC and Massachusetts Secretary of State William Francis Galvin, who filed a similar action. Galvin also charges that the principals have charged the investors millions of dollars illegitimately.
An attorney for the fund and one of the principals, Evan Andersen, 25, of Boston, declined to comment. An attorney for the other principal, Glenn Manterfield, 44, of Britain, said, "We have cooperated with the SEC and expect we will continue to work to resolve this matter, " but hasn't had a chance to fully review the charges.
The regulators charge Lydia and its principals participated in a complex scheme whose details still remain under investigation. The heart of the scheme allegedly centered on the funds' investments in "life settlement" securities, or the purchase of life insurance policies from individual holders for less than their face value. Typically these policies are sold when the holder no longer needs the coverage, though some carriers restrict when policies may be resold.
Galvin's complaint alleges that Lydia Capital's agents in Indiana and California solicited seniors to buy the policies. On about half of these applications the policyholders allegedly falsely claimed they had no intention to sell their policies.
That they then did so could allow insurance companies to rescind the policies and diminish the value of Lydia Capital, both Galvin's office and the SEC allege.
This also put the hedge fund and its managers in violation of its promises to investors, they charged.
Lydia Capital also falsely claimed it had offices in Singapore and Mexico, and that it had investors in South America who didn't exist.
Galvin further claimed that the two principals created a front company called Nordic Mutual, which they called a private Scandinavian financial institution, and said it had offered a "structured note" to Lydia Capital that didn't exist but was meant to bolster the Boston company's image.
Regulators also charged that Lydia provided false information after being asked about its bank accounts.
Laura
Tel Aviv
Israel
0 comments