The Financial Industry Regulatory Authority said Thursday that it has barred two Buffalo, New York-based brokers from the securities industry for fraud in connection with the sale of a hedge fund, the Prestige Wealth Management Fund LP.

The brokers’ misconduct occurred while they were employed with Mid Atlantic Capital Corp.

FINRA’s investigation found that Timothy S. Dembski and Walter F. Grenda made material misrepresentations and omissions to lead investors to believe that the hedge fund was a “growth” fund that would be based on a computer algorithm that automatically included risk protections and stop-losses to limit losses in the fund.

However, the fund “was a highly speculative investment, the fund’s chief investment officer had complete control over the investments made, and it was not obligated to follow the computer algorithm,” FINRA states. In the last full month that the fund traded, it lost over 80% of its value.

“In 2015, FINRA barred nearly 500 brokers from the securities industry and we will continue to root out those brokers who seek to take advantage of their customers,” said Brad Bennett, FINRA’s executive vice president and head of enforcement.

When marketing the hedge fund, Dembski and Grenda distributed a private placement memorandum (PPM) that they knew contained material misrepresentations about the chief investment officer’s professional experience, FINRA found.

The PPM stated that the chief investment officer had “worked in the financial services industry for over 14 years,” “co-managed a portfolio of over $500 million” and was a “vice president of investments for a New York based investment company,” all of which were false, FINRA states.

In settling this matter, Dembski and Grenda neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.