The two founders of Amerindo Investment Advisors Inc., Alberto Vilar and Gary Tanaka, were charged with fraud by federal prosecutors in Manhattan, according to press reports.
Dow Jones reported that Messrs. Vilar and Tanaka were accused of stealing millions of dollars from investors to make charitable donations and to purchase thoroughbred racehorses.
Prosecutors allege that in 2002, Vilar improperly used money from a client who invested $5 million into a personal account for himself and used it to fulfill pledges he made to two charities.
Further details were unavailable from the firm
Amerindo Investment Advisors generated huge returns in the late 1990s by investing in stocks of emerging technology and Internet companies. After the technology bubble burst, the company's assets under management dropped from $8 billion in March 2000 to about $1.5 billion now.
Back in May 2003, two Amerindo mutual funds, Amerindo Internet B2B Fund and Amerindo Health & Biotechnology Fund, were folded into the Amerindo Technology Fund/D (ATCHX), which is now the sole surviving fund run by the firm.
The portfolio, which soared 249% in 1999, plunged 64.8% in 2000, and 50.8% in 2001, much harder than the average fund that invests in technology. Amerindo Technology is down 16.8% in year-to-date through last Friday.
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