The term “hedge funds” refers to private investment partnerships. Because these types of investments typically protect only accepted investors with significant amounts of wealth, there are minimal regulations associated with them. Hedge funds generally promise high returns in exchange for less oversight and higher financial contributions. The theory behind the minimal regulations is that wealthy investors are more financially sophisticated than other investors and so they do not necessarily need additional protections as other consumer investment vehicles do.
Although legitimate funds are not illegal, hedge funds have a poor reputation. Due to the negative public opinion on hedge funds, it has recently become politically popular for lawmakers and politicians to more aggressively pursue financial institutions and individuals suspected of hedge fund fraud. If you have facing accusations of wrongdoing or fraud in the operation of a hedge fund, contact an experienced attorney who can provide you with the best possible strategy for addressing these issues.
Here at Raiser & Kenniff, PC, our team understands hedge fund regulations, and we can provide the guidance you need to battle criminal charges, civil lawsuits and SEC enforcement actions. To learn more about how our New York investment fraud lawyers can help, please contact us today.
What is a Hedge Fund Fraud Scam?
Hedge fund fraud involves a number of scams, including the operation of Ponzi schemes, hiding investment losses, advanced fee schemes, embezzlement of client funds and making false promises of high returns. Hedge fund managers may also face accusations of insider trading if they use non-public knowledge to make investment decisions that benefit their clients and themselves.
Since hedge funds are not subject to the same disclosure requirements of publicly-available investment products such as mutual funds, identifying hedge fund fraud can be difficult. Investors may not know that the account statements they are receiving are false and could potentially hide losses, or that they are falling victim to a Ponzi scheme. In addition, because hedge fund managers may use complex investing schemes and financial transactions may be complicated, it may be difficult to provide evidence that the losses were a result of wrongdoing or fraud rather than by normal market fluctuations.
Financial firms that offer hedge fund products and hedge fund managers have several defense options against criminal and civil actions. However, it is important to develop a smart strategy with help from a professional NYC criminal defense attorney. For more information about our legal services and to speak with a member of our legal team about your case, please contact us today.
Hedge Fund Fraud Penalties
Hedge fund fraud penalties will vary depending on type of fraud scheme in which you are allegedly involved. For instance, you could face charges for:
– Wire or mail fraud under U.S. Code Section 1343 or Section 1341
– Insider trading under 10(b) of the Securities Exchange Act
– Securities fraud for making misleading or false statements in connection with the sale of commodities or securities under 18 U.S. Code Section 1348
– Fraud schemes under NY Penal Law Article 190.65
– Taking or misappropriating client money under New York’s embezzlement or larceny laws under NY Penal Code Article 155
The above are just several examples of state and federal examples for which a defendant could be charged. The Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission can also take action against you, or you could be prosecuted, arrested or indicted by the NY Attorney General, the Federal Bureau of Investigation and other federal or state agencies.
Seek Legal Assistance from a New York Investment Fraud Attorney Today
Handling hedge fund fraud cases can be extremely complex and complicated since they hedge funds are not as regulated as other investment vehicles or products. For this reason, it may be difficult to prove guilt or obtain a conviction, but it is still in your best interest to seek legal counsel from a New York investment fraud lawyer who has the knowledge to represent you. A strong legal defense is critical when you are facing accusations of fraud, regardless of the type of fraud or amount of money allegedly taken. To learn more about our investment fraud defense services or to speak to a member of our legal team about your case, please contact Raiser & Kenniff, PC today, and we will be more than happy to help.
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