The SEC and False Reporting
In a similar action against three unregulated hedge funds, the SEC alleged:
that from approximately 1999 to the present, the Defendants have raised at least $81 million from investors nationwide by boasting annualized returns of 125 to 150% over the last several years and by sending false account statements to investors showing similar gains. According to the complaint, the hedge funds were suffering tremendous trading losses and only about $11 million remains of the more than $81 million that investors put into the hedge funds. (my emphasis)
One of the defendants in the above case agreed to a permanent injunction and a disgorgement penalty should soon be decided upon.
What is striking in this: how can false account statements be detected?
