A Fake Harvard Hedge Funder Hit with $7.5Million Fines

//A Fake Harvard Hedge Funder Hit with $7.5Million Fines

A Fake Harvard Hedge Funder Hit with $7.5Million Fines

Andrey Hicks who conned clients by lying  to them that he’s a Harvard-trained hedge fund manager is ordered to pay back more than $7.5 million.

Hicks, a 28-year-old college dropout, portrayed himself as an exclusive hedge fund manager, boasting about two Harvard degrees and impressive experience on Wall Street.

U.S. federal judge Richard Stearns ordered Andrey Hicks to return $2.5 million with interest to clients and to pay a civil fine of $2.5 million. Hicks’ firm- Locust Offshore Management, was also ordered to pay a $2.5 million penalty.

Neither Hicks, who most recently lived in Massachusetts, nor his lawyer could immediately be reached for comment.

Hicks was arrested in Canada last year while trying to flee to Switzerland.

He won media attention partly because of his connection with National Basketball Association player Kris Humphries. Humphries, the former husband of reality TV star Kim Kardashian, had invested money with Hicks, according to a government source familiar with the matter.

The ruling by Judge Stearns ends one of the more brazen recent hedge fund frauds, at a time when many wealthy investors are still reeling from the shock of the Bernard Madoff and Allen Stanford investment swindles.

Texas financier Stanford was convicted earlier this month of running a $7 billion Ponzi scheme, and he will be sentenced on June 14. [ID:nL2E8E67JD] Madoff was arrested in 2008 and is serving a 150-year prison term for a Ponzi scheme considered to be the biggest financial fraud in U.S. history.

Hicks, a 28-year-old college dropout, portrayed himself as an exclusive hedge fund manager, boasting about two Harvard degrees and impressive experience on Wall Street.  The trim, clean-cut fellow allegedly defrauded 10 investors of $1.7 million by promising outsized returns via high-frequency trading at his fictitious Locust Offshore Fund. He was arrested in Canada Friday en route to Switzerland, according to the SEC.

In an offering memorandum, Hicks said Ernst & Young was the hedge fund’s auditor while Credit Suisse served as its prime broker and custodian. The accountants did not audit the fund and Credit Suisse said it had no records of accounts held by Locust Offshore Fund.

Hicks also lied about his work experience, saying he had worked for Barclays Capital, where he “grew his book nearly two-fold and expanded his group’s assets under management to roughly $16,” the SE

http://www.reuters.com/article/2012/03/22/us-hedgefunds-hicks-idUSBRE82L19P20120322C said

2012-03-24T21:52:22+00:00

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