Hedge Fund Fraud Crimes Explained by a NY Investment Fraud Lawyer
Hedge funds are private investment partnerships. There are minimal regulations associated with hedge funds because these types of investment protects typically only accepted investors with significant levels of personal wealth. Hedge funds typically promise higher returns to investors in exchange for more significant financial contributions and less oversight. The idea behind hedge funds and the reason for the minimal regulation is that high wealth investors are more financially sophisticated and thus do not need the added protections applicable to most consumer investment products.
Hedge funds have gotten a bad reputation, although legitimate funds are not illegal. Unfortunately, public opinion on hedge funds has made it politically popular for politicians and lawmakers to be aggressive in pursuing individuals and financial institutions suspected of involvement with any type of fraud scheme related to hedge funds. If you are accused of fraud or wrongdoing in connection with operation of a hedge fund, you need to get help from a NY investment fraud lawyer who has the experience and knowledge necessary to advise you on an effective strategy for addressing your serious legal issues.
Bukh Law Firm, PLLC understands the regulations related to hedge funds and can provide the assistance and guidance you need to handle SEC enforcement actions, civil lawsuits and criminal charges. Give us a call to learn how our NYC investment fraud attorneys can help you
What is Hedge Fund Fraud?
Hedge fund fraud can involve many different types of scams including making false promises of high returns; embezzlement of client funds; advanced fee schemes, hiding investment losses; and the operation of Ponzi schemes. Hedge fund managers may also be accused of insider trading when they use non-public proprietary knowledge to make investment decisions to benefit themselves and their clients.
Identifying hedge fund fraud can be difficult because hedge funds are not subject to the same disclosure requirements of mutual funds and other publicly-available investment products. Investors may also be unaware of the fact that they are being victimized by Ponzi schemes or may be unaware that they are receiving false account statements to hide losses. Because financial transactions can be complicated and hedge fund managers may use complex investing schemes, it may also be hard to prove that losses were caused by fraud or wrongdoing rather than simply by normal market forces.
Hedge fund managers and financial firms offering hedge fund products have many options for defending against civil and criminal actions. However, you need to develop a smart strategy for dealing with accusations of hedge fund fraud. A New York City criminal defense lawyer at Bukh Law Firm, PLLC can provide you with advice on developing your case and defending yourself.
Penalties for Hedge Fund Fraud
Penalties for hedge fund fraud vary depending upon the type of fraud scheme you were allegedly involved in. A defendant could face charges for:
- Misappropriating or taking client money under New York’s larceny and embezzlement laws found in NY Penal Code Article 155
- Fraud schemes under NY Penal Law Article 190.65.
- The criminal falsification of business records under NY Penal Law Article 175.
- Securities fraud under 18 U.S. Code Section 1348 for making false or misleading statements in connection with the sale of securities or commodities.
- Insider trading under 10(b) of the Securities Exchange Act
- Mail or wire fraud under 18 U.S. Code Section 1341 or Section 1343.
These are just some of the many different federal and state offenses for which you could be charged. The Securities and Exchange Commission and Financial Industry Regulatory Authority (FINRA) can take action against you, or you could be indicted, arrested, and prosecuted by the FBI, the NY Attorney General, and other state or federal agencies.
Getting Help with Hedge Fund Fraud Causes from a NY Investment Fraud Lawyer
Bukh Law Firm, PLLC knows that hedge fund fraud cases can be complicated to prove because hedge funds are not as well regulated as other investment products. Still, you need to ensure you have a strong legal defense when you are having legal problems related to accusations of fraud.
