Hedge Fund Reader : Another Hedge Fund Manager sent behind bars

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October 17, 2005

Another Hedge Fund Manager sent behind bars

Hedge Funds scandals just does not seem to end, here is a case of misappropriation of funds by then sole manager of ETJ hedge fund, Mr. Edward Thomas Jung. He was also a controlling General Partner of ETJ Partners Ltd., a broker-dealer, where he used to trade stock options on the Chicago Board Options Exchange. The Securities and Exchange Commission (SEC) filed a civil complaint against Mr. Jung and his firm, ETJ Partners, in June 2001, for false representation of performance to prospective investors and the misappropriation of current investors' assets between 1994 and 1998. Mr. Jung has been fined $21 million in restitution charges and will face prison sentence of more than nine years, for luring 55 investors with false trading performance reports. Mr. Jung has been barred from from associating with any broker or dealer or investment adviser, and SEC has revoked the registration of its ETJ Partners' in March this year. Lipper HedgeWorld Reports:

ETJ's offering was the Strategic Income Fund LLC, and it had 55 investors, who lost more than US$21 million. Prosecutors say that investors were lulled into a false sense of security through misleading trading performance reports.

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October 17, 2005 in Gossip & Scandal | Permalink