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Hedge Fund Lawsuits

Around 400 people across the US have been charged in Operation Malicious Mortgage, a crackdown on mortgage fraud. Victims are believed to have lost more than $1 billion to fraudulent activity, including cheating lenders and swindling people facing foreclosure.


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Hedge Fund Mortgage Fraud

New York, NY: The government has unsealed an indictment against two former Bear Stearns Cos. hedge fund managers. The managers were arrested June 19, 2008, after they were indicted by a federal grand jury.

FraudThe former Bear Stearns hedge fund managers face nine charges including conspiracy, wire fraud and security fraud. They are alleged to have misled investors about the declining value of two hedge funds, the High Grade Fund and the Enhanced Fund. The men were charged based on a personal email between the two, which allegedly shows knowledge that the funds were in trouble just prior to assuring investors that the funds were fine.

According to the indictment, the investors marketed the Enhanced Fund as generating greater profits than the High Grade Fund (in which clients previously invested their money) but that the Enhanced Fund had only "limited additional risk." In fact, the Bear Stearns managers and other advisors, told investors that they invested their own money in the funds, however one manager apparently never invested his own money and the other withdrew some of his investment without telling investors.

The managers are further alleged to have "misrepresented or omitted material facts in communications with investors and lenders about a variety of topics, including the financial prospects of the Funds, their opinions regarding the financial prospects of the Funds, their personal investments in the Funds, the Funds' investor redemption requests, the Funds' liquidity picture, and the Funds' exposure to the subprime market."

In other hedge fund news, Citigroup has offered investors a settlement of between 45 percent and 54 percent of their investments in certain hedge funds. The organization is alleged to have marketed certain hedge funds as being higher-yielding investments than a municipal bond but with very little additional risk. Brokers and fund managers allegedly told investors that even in a worst case scenario, the hedge fund would post losses of no more than five percent a year. In actuality, investors allege they lost a lot of money on Citigroup's hedge fund.

Hedge funds have been in the news a lot, lately. Earlier this year, UBS Fund Services brought charges against MF Global Inc., alleging that a hedge fund scandal defrauded clients out of over $200 million. Meanwhile, the US Securities and Exchange Commission (SEC) brought charges last year against Sandell Asset Management, alleging the firm made inappropriate short sales related to Hibernia Corporation. The SEC alleges the short sales were designed to benefit from the aftermath of Hurricane Katrina.

People who put their money in hedge funds and other investments rely on the advice of their financial advisors. They trust their advisors to give them sound advice regarding safe and risky investments. Unfortunately, some advisors are willing to betray their clients' trust and give them misleading information.

If you have been the victim of an unscrupulous financial advisor, who misled you regarding the stability of hedge fund investments, contact a lawyer to discuss your legal issues.

Hedge Fund Mortgage Fraud Legal Help

If you or a loved one has suffered damages in this case, please click the link below to send your complaint to a lawyer to evaluate your claim at no cost or obligation.

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July 18, 2008
Palm Beach, FL Unscrupulous hedge fund managers and other financial advisors should be very nervous. Recent news has been filled with reports of indictments, lawsuits and arbitration cases against advisors who used their role for their own gain rather than for the benefit of their clients. More and more frequently, investors are holding their advisors accountable for providing misleading investment information. And they are not the only ones—even the FBI is getting involved READ MORE

Hedge Fund Lawsuits: Did Your Hedge Fund Live Up to its Promise?
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July 17, 2008
New York, NY People who are tired of hearing about hedge fund lawsuits may have to wait a while until the furor dies down. A lawsuit against Bear Stearns continues to make the news as amendments are filed, while lawsuits against other hedge fund managers are just getting underway. The common thread in these suits is the allegation that managers have violated their fiduciary duty to investors and hedge funds have not lived up to managers' promises READ MORE

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Memphis, TN More and more investors are losing money as their hedge fund investments collapse. Some have lost hundreds of thousands of dollars after they made investments based on misleading information from hedge fund managers and other financial advisors. Investors are now filing lawsuits, alleging they lost a lot of money because of unethical financial advisors READ MORE
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