COLUMBUS, Ohio (HedgeWorld.com)–The Securities and Exchange Commission has started administrative proceedings against hedge fund Sierra Equity Partners LP and its founder John Christopher McCamey.

The SEC’s division of enforcement said that Mr. McCamey established a fraudulent, unregistered offering of securities in a hedge fund in November and December of 2001. According to the enforcement proceedings on the SEC’s website, solicitations made in letters to broker-dealer Sierra Brokerage’s clients, through spam emails and Sierra Brokerage’s website, allegedly contained false and misleading statements regarding the safety and the returns investors could expect from the hedge fund.

Sierra Brokerage, of which Mr. McCamey is a principal, told investors that interests in the fund were government secured and would produce annual returns of 15% to 50% per year. The fund was actually invested in real estate tax lien certificates, according to the SEC, which are not government secured.

Mr. McCamey allegedly raised $10,000 for the hedge fund from one investor on Nov. 28. In mid-December 2001, the hedge fund was terminated and the $10,000 investment was returned.