Hedge Fund Sharks Need To Be Netted

[Guest Enron Ex]

This is not Jamie Dimon against one other fund, this is the might of one against 100. Details are sketchy. JPM’s Central Investment Office portfolio has increased in size from $76 billion in 2007 to $356 billion in 2011. The tide is wading from losses coming from European exposure.

[Guest LAW]

A federal jury convicted international hedge fund founder Albert Ke-Jeng Hu of seven counts of wire fraud, United States Attorney Melinda Haag announced. The guilty verdicts followed a three-week trial before U.S. District Court Judge Ronald M. Whyte.

 

Evidence at trial showed that Hu, 50, formerly of Fremont, California, and Hong Kong, carried out an investment fraud scheme from 2002 to 2008 that defrauded multiple investors of millions of dollars. Hu founded and operated hedge funds under the names Asenqua Beta Fund and Fireside LS Fund out of locations in San Francisco, Sunnyvale, and Singapore. Hu lied to investors by telling them that he had more than $200 million in his hedge funds and that they would receive rates of return as high as 20 to 30 percent a year. Hu also lied about entities that were supposedly affiliated with his hedge funds, such as a prominent law firm, an auditing firm, a hedge fund administrator, and a chief financial officer. In reality, none of those entities ever had any connection with Hu’s hedge funds. Evidence at trial showed that Hu targeted prominent members of the Chinese-American business community in Silicon Valley as part of his investment fraud scheme. Ultimately, Hu invested virtually none of his investors’ money, instead diverting it to pay his own personal expenses as well as prior investors and others.

 

Hu has been in custody since his arrest in Hong Kong on March 17, 2009. After the United States successfully obtained Hu’s extradition from Hong Kong, former United States Magistrate Judge Patricia V. Trumbull in 2009 granted the United States motion to have Hu detained pending trial as a flight risk.

 

Hu is scheduled to be sentenced on September 10, 2012, at 9 a.m. before United States District Court Judge Ronald M. Whyte in San Jose. The maximum statutory penalty for each count of wire fraud in violation of Title 18, United States Code, Section 1343, is 20 years in prison and a fine of $250,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

 

Assistant United States Attorneys Joseph Fazioli and Timothy Lucey prosecuted the case with the assistance of Legal Assistants Nina Burney and Kamille Singh and Paralegal Specialist Lakisha Holliman. The prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation. The United States Attorney’s Office recognizes the substantial and valuable assistance of the San Francisco Regional Office of the Securities and Exchange Commission in this matter.

 

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.