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Investigation of Hedge Fund with $38M in Misappropriated Funds

J.S. Held Acquires GLI Advisors, Strengthening Our Construction Project Support Services in the Western US and Hawaii

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Home·Investigation of Hedge Fund with $38M in Misappropriated Funds

The Situation

Hedge fund. $25 million annual sales. Bank debt is minimal.

  • $150 million under investment.
  • Insiders allegedly used $ 38 million.
  • SEC enforcement actions are ongoing, including the forceful taking of most company records and computers.
  • Three owners were building a fund management company. One partner is in jail, the other two are under indictment.
  • They acquired asset management companies and managed several specific-purpose investment entities.
  • Their primary line of investment was market-timing strategies, which were under severe review by the SEC and the mutual fund industry.
  • Investors wanted to redeem their money, but there were no funds available.

How We Advised

Our experts were brought in to review the books and records and assist the SEC-appointed receiver in his investigation.

  • Our thorough review of the company’s activities resulted in the identification of 35 total LLC entities, encompassing 108 bank and financial institution accounts, which were ultimately seized and liquidated for the benefit of investors.
  • In total, we identified over $38 million in misappropriated funds and prepared the majority of the analyses and schedules for the comprehensive Receivers’ report.
  • Our team was hired as advisors to the SEC as part of their work in support of the prosecution by the US Attorney’s office against the individuals.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Investigations and Litigation Support 
When an investigation or litigation involves a company in financial distress, we help uncover the truth behind the numbers, recover assets, and navigate complex legal landscapes. We combine forensic accounting, fiduciary services, and litigation experience to expertly guide business owners, stakeholders, lenders, creditors, regulators, and counsel seeking recovery in distressed situations. 

 

> Solutions for Distressed Situations 
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