Monday, May 18, 2009

A hedge fund manager in Beverly Hills, Calif., bilked investors out of about $44 million while claiming annual returns of as much as 60 percent

TO BE NOTED: From the NY TIMES:

"
Hedge Fund Manager Accused of Fraud

A hedge fund manager in Beverly Hills, Calif., bilked investors out of about $44 million while claiming annual returns of as much as 60 percent, prosecutors said.

The manager, Bradley L. Ruderman, 46, was taken into custody on Friday. Mr. Ruderman, the founder and manager of Ruderman Capital Partners, faces as much as 20 years in prison if convicted of wire fraud.

He raised $44.3 million over the last eight years from 22 investors, mostly family members, the statement said. Mr. Ruderman sent a letter to the investors last month saying the funds were almost depleted. Mr. Ruderman spent $8.7 million of the money on personal expenses, including two Porsches and $5.2 million he lost in poker games, prosecutors said.

Mr. Ruderman’s lawyer, James Riddet, did not immediately return a call seeking comment.

The Securities and Exchange Commission sued Mr. Ruderman and obtained an emergency court order on April 29 freezing his assets. He falsely claimed that Lowell Milken, chairman of the Milken Family Foundation, and the chief executive of Oracle, Larry Ellison, were investors in his funds, the S.E.C. said."

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