RIA Compliance Blog
The Securities and Exchange Commission (“SEC”) announced earlier this month that it obtained an asset freeze against a Boston-area money manager and his investment advisory firm who allegedly mislead advisers in a quantitative hedge fund and diverted a portion of investor money into his personal bank account.
In its allegations, the SEC claimed that Andrey C. Hicks and Locust Offshore Management, LLC made false representations to “create an aura of legitimacy when selecting individuals to invest in a purported million dollar hedge fund.” Hicks is alleged to have raised $1.7 million from several investors. According to the SEC’s complaint, Hicks misrepresented that he had obtained an undergraduate and graduate degree at Harvard University and that he previously worked for Barclays Capital. He also misrepresented that the hedge fund held more than $1.2 billion in assets, according to the complaint.
U.S. District Court Judge Richard Sterns of the District Court for Massachusetts issued the restraining order and asset freeze.
The SEC also contended that Hicks and his firm falsely claimed that the firm employed strategies using quantitative models that were based upon mathematical formulas that Hicks developed while at Harvard. What investors did not know, according to the SEC, was that Hicks only attended Harvard’s undergraduate college for three semesters and never graduated after twice withdrawing for lack of academic performance. He allegedly told his investors that he received his undergraduate degree from Harvard in 2005 and a graduate degree in 2007.
Hicks and his firm also misrepresented that Ernst & Young served as the firm’s auditors and that Credit Suisse served as the firm’s prime broker and custodian, according to the SEC complaint.
Parker MacIntyre provides legal and compliance services to investment advisers, broker-dealers, registered representatives, hedge funds and issuers of securities, among others. Our regulatory practice group assists financial service providers with the complex issues that arise in the course of their businesses, including compliance with federal and state laws and rules.