The Securities and Exchange Commission charged a Connecticut man with misappropriating at least $53 million of investor funds, saying he invested the money for himself.
The SEC alleges that Francisco Illarramendi defrauded investors in the hedge funds he managed by improperly transferring their money into bank accounts he personally controlled and then investing that money in private-equity investments, including a developmental-stage West Coast nuclear energy company and a manufacturing company in early development of clean-tech mass-transportation alternatives.
His biggest investor, an unnamed foreign company pension fund, contributed 90% of the money in his funds, the SEC said in a complaint filed Friday in federal court in Connecticut. Other investors were also based offshore.
Mr. Illarramendi, 41 years old, is the majority owner of Stamford, Conn.-based Michael Kenwood Group, LLC, an unregistered investment adviser, which in turn owns a number of entities through which Mr. Illarramendi advised hedge funds. According to a filing with the Financial Industry Regulatory Authority, he worked at Credit Suisse from 1994 to 2004 and was recently affiliated with a Stamford-based registered investment adviser, Highview Point Partners.
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