Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, March 4, 2013

SEC Charges Advisers to RAHFCO Hedge Funds with Fraud

The SEC recently filed charges relating to the fraudulent offer and sale of limited partnership interests in two hedge funds -- RAHFCO Funds LP and RAHFCO Growth Fund LP (collectively "RAHFCO Hedge Funds"). The Commission charged RAHFCO Management Group, LLC ("RAHFCO Management"), general partner of RAHFCO Hedge Funds; its principal, Randal Kent Hansen; Hudson Capital Partners Corporation (HCP), the sub-adviser/portfolio manager of RAHFCO Hedge Funds; and Vincent Puma, the principal of HCP, with securities fraud, for engaging in a fraudulent scheme that defrauded investors out of more than $10 million.

The Commission's complaint alleges that the RAHFCO Hedge Funds raised approximately $23.5 million from over 100 investors nationwide between 2007 and the funds' collapse in about May 2011. Additionally, the complaint alleges that the primary function of the Defendants' scheme was to convince investors to invest in fraudulent pooled investments that purportedly traded in options and futures on the S&P 500 Index and in equities, then the Defendants siphoned off the invested funds for the Defendants' own purposes.

The Commission's complaint seeks permanent injunctions, third-tier civil penalties, disgorgement plus prejudgment interest, and other relief against all of the defendants.

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