Ex-hedge fund manager ordered to pay $300 million (Reuters)
Paul Eustace, the moulder of Philadelphia Alternative Asset Management Company, must return more than $279 million to clients and pay about $12 million in civil penalties, the regulator said.
Eustace, who represented himself in the circumstance, had been indicted on two criminal counts of commodities fraud. He signed the consent order last week and could not be reached in person in succession Tuesday.
The foundation, that collapsed in 2005, was ordered to pay a $8.8 million fine. It may also be ordered to pay $276 million in restitution if Eustace is not able to pay.
The court appointed Philadelphia-based law firm, Stradley, Ronon, Stevens & Young, LLP to act as receiver and account for the assets and collect them. The receiver has even now recovered $96 million.
Additionally, regulators froze about $70 the multitude at the time the Commodity Futures Trading Commission at the outset brought the case.
Prosecutors accused Eustace, who lives in Canada, of having fabricated false trading account statements that hid mounting losses between October 2002 and May 2005.
While he told clients that he would pursuit commodity futures or options and said the portfolios were valued at over $230 million in May 2005, prosecutors alleged that he fraudulently operated the funds and lost millions of dollars.
"This concludes a successful stretch by our es trangement of compulsion to stop fraud in its tracks, return as much riches as in posse to defrauded investors," Walter Lukken, action chairman of the Commodity Futures Trading Commission, which filed the lawsuit, said in a report.
(Reporting by the agency of Svea Herbst-Bayliss, editing by Richard Chang)
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