Wednesday, May 4, 2005

Hedge Fund Manager Charged With Fraud

Vincent Montagna, who managed two hedge funds (Tiburon Asset Management and Tiburon Partners), was indicted on two counts of securities fraud, two counts of investment adviser fraud, and five counts of wire fraud related to his operation of the funds for his personal benefit.  According to the press release issued by the U.S. Attorney's Office for the Southern District of New York (here)

MONTAGNA converted assets held by each of the Tiburon Companies to his own use. MONTAGNA transferred Tiburon assets to Quantus Holding Company, where they were used to pay for  Montagna’s personal expenses, including credit card bills, travel expenses, the cost of a mink jacket, and car payments. MONTAGNA also caused Tiburon investors to pay, on at least two occasions, his personal income taxes. MONTAGNA also transferred ownership of property held by Tiburon Asset Management to a company nominally controlled by his wife. In addition, MONTAGNA improperly redirected to himself or to his wife monies that were paid to him, as manager of the Tiburon Funds for the benefit of those companies.

The SEC filed a civil complaint against Montagna and his wife, Christine Palmer, for "allegedly defrauded the investors and prospective investors by: repeatedly causing extremely positive – and false – performance claims to be disseminated to them; failing to disclose to investors the declining value and increased risk of Fund holdings; failing to disclose conflicts of interest he had with respect to certain investments; converting Fund income and assets for his own (or his wife's) benefit; and causing the Funds to make payments to him and his associates in excess of the amounts to which they were entitled."  See the SEC Litigation Release here. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/05/hedge_fund_mana.html

Fraud, Prosecutions, Securities | Permalink

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