WASHINGTON (HedgeWorld.com)–The Securities and Exchange Commission is scheduling public administrative hearings against hedge fund managers Paul J. House and Brandon R. Moore.

The proceedings are based on the injunction filed on June 20 in the case of the SEC v. House Asset Management LLC . In June, the SEC got an order of permanent injunction and froze the assets of House Asset Management and House Edge LP, the hedge fund managed by Messrs. House and Moore. The pair allegedly raised US$2.9 million from at least 60 investors through an unregistered offering of units in the House Edge fund.

Messrs. House and Moore both consented to an order that permanently prevents them from violating specific securities laws without admitting or denying the commission’s allegations, the SEC announced.

According to the SEC’s original complaint, both men were involved in a hedge fund that was part of a scheme to defraud investors. Mr. House was the managing member of House Asset Management LLC, while Mr. Moore was chief financial officer of the Decatur, Ill.-based firm.

The SEC alleges that the defendants falsely told investors that the hedge fund had generated cumulative returns of up to 148%, when in reality the fund had lost at least US$850,000 during its operation. Messrs. House and Moore also allegedly borrowed at least US$400,000 from the hedge fund to purchase real estate for themselves. Both men had prior personal bankruptcies, which was information not included in the offering materials, the SEC pointed out in its administrative proceeding filing. The commission also alleges that the pair made false and misleading statements in the offering materials about Mr. House’s background as a broker.

A hearing will be scheduled before an administrative law judge to determine whether the allegations are true, to give the defendants an opportunity to dispute the allegations and to see what sanctions are appropriate and in the public interest.