US - The Securities and Exchange Commission has charged a US money manager with allegedly inventing clients to inflate the amount of assets under management at the firm.
According to the Commission, Jenkins told clients, potential clients and the SEC that assets reached up to US$1.6bn when in fact, assets were a mere $164m. Existing clients included hedge funds, which invested up to $10m, institutional investors, high net worth individuals and two separately managed accounts for wrap fee clients.
According to the SEC, Jenkins reported false information in brochures, meetings, submissions to online databases and in SEC filings.
Director of the SEC's regional office in Boston, David Bergers, said: "This brazen web of lies to investors constituted a serious breach of fiduciary duty."
Deputy director of the SEC's division of enforcement, George Curtis, added: "Today's enforcement action demonstrates that investment advisers who lure clients with false claims will be held accountable for their actions. In this case, the conduct was particularly egregious because Jenkins lied to the SEC staff to try to escape detection."
This is the latest in a string of charges the SEC has filed against money managers allegedly out to swindle investors.
Late last month, the Federal Bureau of Investigation arrested four investment managers in three separate cases that alleged the managers defrauded investors out of a combined US$680m. All the involved parties were being investigated by the SEC as well. (Global Pensions, 26 February 2009)
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