WALTHAM, Mass. (HedgeWorld.com)–A hedge fund manager has been ordered to pay $21 million in disgorgement and prejudgment interest following the firm's failure to appear and respond to the Securities and Exchange Commission's allegations.
The SEC won a default judgment against the adviser Groundswell Partners LLC, barring the hedge fund firm from future violations of securities law in addition to hefty fines. The hedge fund had approximately 75 investors, including friends and family of portfolio manager Mark R. Conway, who together invested US$14 million in Groundswell Capital LP.
Mr. Conway and the fund were charged last November with fraud; the SEC alleged that documents were altered to cover-up Mr. Conway's misrepresentations to investors. Part of the evidence entered into the courtroom was a conversation taped by a former business partner. The most recent court action on June 30 included a default judgment against Groundswell Capital LP, which was the fund managed by Mr. Conway.
A court order last year was granted in the U.S. District Court in Massachusetts and froze a certain amount of the defendant's assets, saving some for Mr. Conway's personal expenses.
Contact Bob Keane with questions or comments at bkeane@investmentadvisor.com.
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