On September 29, 2009 William A. Huber was charged by the Securities and Exchange Commission in connection with alleged illegal activities committed by the private wealth manager and his company, Hubadex Inc., based in Decatur, Illinois. The SEC states that Huber lied to investors, stating that funds he controlled held more than $40 million as of August 31, 2009, when in reality those funds held little over $3 million. The funds in question include: The Quarter Funds, L.P., The Symmetry Fund, L.P. and The Trimester Fund.
Further, it is alleged that Huber made Ponzi-like payments to investors, using newer investment funds as redemption payments to investors at inflated rates. This is in direct contradiction to the fact that he lost money on his trading throughout 2009. Rather than inform his clients of this fact, he stated that substantial returns had been realized. Huber then collected performance fees he did not earn based on those falsely stated returns.
Not only did Huber lie to his clients in this manner, but he went so far as to divert investor funds to further his personal life. With diverted funds he bought homes in Naples, Florida and La Jolla, California. During the furor created by the Bernie Madoff fiasco, Huber even went so far as to write a letter to his clients assuring them that he managed his funds honestly and that his funds in no way correlated to those managed by the infamous Madoff.
The SEC complaint alleges that Huber lied to SEC staff members during their investigation of his activities, reporting false account balances to the SEC and claiming hedge fund investments that did not exist.
The SEC's complaint charges Huber and Hubadex with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and seeks injunctive relief, disgorgement, prejudgment interest, civil penalties and the appointment of a receiver. The SEC's complaint also names Huber's wife, Ruthann Huber, and Huber's investment funds, The Quarter Funds, L.P., The Symmetry Fund, L.P. and the Trimester Fund, as relief defendants based on allegations that they received ill-gotten gains from Huber's fraud.
No comments:
Post a Comment