....And another fund bites the dust. From the Boston Globe: The Securities & Exchange Commission charged a Miami hedge fund manager who used to run a $1 billion hedge fund that specialized in making asset-backed loans in Latin America with misleading investors regarding how much of his own money he had invested in the fund. Javier Guerra, who ran Quantek Asset Management and its Quantek Opportunity Fund, has agreed together with Quantek to pay $2.7 million to settle the charges. In addition, Guerra will be barred from the securities industry for five years. At its height prior to the financial crisis, Quantek Opportunity had $1 billion of assets.
The Fed’s enforcement action vindicates the efforts of Jason
Papastavrou, who runs Aris Capital Management and a fund of hedge funds that
invested in Quantek. Papastavrou clashed with Guerra, bringing a lawsuit in
2009 that claimed Guerra had engaged in self-dealing and fraud. Yet when
Papastavrou tried to work with other investors in the Quantek hedge fund, many
of those investors directed their anger at Papastavrou and pleaded with him to
stop his crusade against Guerra.
In its enforcement action, the SEC said that Quantek Asset
Management misled investors about fund managers like Guerra having “skin in the
game” and that Quantek’s execs never invested their own money in the Quantek
Opportunity Fund. The SEC also claimed that Quantek kept investors in the dark
about certain related-party transactions involving Guerra...
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