NEW YORK (HedgeWorld.com)–Michael L. Smirlock, former president and chief executive of hedge fund manager Laser Advisers Inc., Short Hills, N.J., is scheduled to surrender himself to the custody of the federal Bureau of Prisons Thursday, August 1, to begin serving his sentence of four years of incarceration.

Just last week the Securities and Exchange Commission announced the settlement of its civil action against Mr. Smirlock and Laser Advisers.

In its complaint in that civil action, the SEC alleged that from December 1997 to June 1998, Mr. Smirlock unlawfully schemed to inflate the value of the investment portfolios of Laser’s three hedge funds, in particular through his handling of options on interest-rate swaps.

In the civil settlement, Mr. Smirlock neither admits not denies any of the charges against him and accepts a permanent bar from any association with an investment adviser, as well as an injunction against violations of the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 or regulations enacted pursuant to either.

The criminal sentence is as harsh as it is largely because Mr. Smirlock is a recidivist. He was charged with aiding and abetting violations of the antifraud and racketeering provisions of the Investment Advisers Act in November 1993.

Mr. Smirlock was represented against both the civil and criminal charges by William M. Brodsky of Baden, Kramer, Hoffman & Brodsky PC, a New York-based firm founded in 1979 that focuses on white-collar criminal defense. Mr. Brodsky said this week that under federal statutes his client would have to serve at least 85% of the sentence imposed, which is three years five months.

In the 1980s, Mr. Smirlock had a more scholarly reputation. In 1984, he co-authored an important paper on the value of “Tobin’s q” as an index of management performance. (Tobin’s q, named after the late Yale economist James Tobin, is the market value of enterprise assets divided by their replacement cost.) The other authors of that paper, Thomas Gilligan and William Marshall, both professors at the Marshall School of Business, the University of Southern California, could not be reached for comment.

The charges that have now led to Mr. Smirlock’s date with the Bureau of Prisons Aug. 1 involved the alteration of documents and the false pretense that Mr. Smirlock had Bermuda swaptions in the portfolios when in fact he had less valuable European waptions.