A Boston hedge-fund manager and his son will pay $4.8
million to settle U.S. regulatory claims that they lured customers with a
fabricated track record before investing with other funds, including Bernard L.
Madoff’s fraud, the good folks at Bloomberg say.
Gabriel Bitran, 66, founded GMB Capital Management LLC in
2005 and with his son Marco Bitran raised more than $500 million over a
three-year period, the Securities and Exchange Commission said in an
administrative order filed today. The two men, who resolved the claims without
admitting or denying wrongdoing, also agreed to be barred from the securities
industry.
To market their fund, the Bitrans created performance
records dating from 1998 that showed annualized returns of as much as 16.2
percent with no down years, the SEC said. They told investors the records were
based on actual trading using Gabriel Bitran’s optimal-pricing models when they
were actually based on hypothetical historical investments, according to the
order…..
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