An MIT business professor and his son have agreed to pay
nearly $5 million and quit the securities industry to settle SEC charges that
they and their advisory firm misled investors, the Boston Herald reports.
Authorities claim Gabriel Bitran and his son, Marco, raised
some $500 million from investors by falsely maintaining they had a long track
record of market success using the elder Bitran’s quantitative-analysis models.
In reality, the pair mostly put clients’ money into other
firms’ hedge funds and generated their track record by back-testing
hypothetical simulations, regulators say.
“The Bitrans solicited investors by touting an impressive track
record and a unique investment strategy — (but) they lied about both,” David
Bergers of the U.S. Securities and Exchange Commission said today in announcing
the settlement….
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