Thu, Apr 2, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

SEC charges Yorkville Advisors with overvaluing AuM, exaggerating returns

Thursday, October 18, 2012

Benedicte Gravrand, Opalesque Geneva – New Jersey-based Yorkville Advisors LLC, a former $1 billion hedge fund advisory firm, and founder and president Mark Angelo and chief financial officer Edward Schinik were charged today by the U.S. Securities and Exchange Commission (SEC) with scheming to overvalue assets under management (AuM) and exaggerate their hedge funds’ reported returns.

Angelo, 40 and Schinik, 47, allegedly did so – at least since 2008 – to hide losses and increase the fees collected from investors. Apparently, they also misrepresented the safety and liquidity of the investments made by the hedge funds. The hedge funds in questions were YA Global Investments (U.S.) LP (launched in 2005) and YA Offshore Global Investments Ltd (launched in 2001). Angelo and Schinik enticed more than $280m in investments from pension funds and funds of funds. This enabled Yorkville to charge the funds at least $10m in excess fees based on the inflated values of Yorkville’s AuM.

Aberrational Performance Inquiry According to the SEC’s release , this is the agency’s seventh case arising from its own Aberrational Performance Inquiry, an initiative by the Enforcement Division’s Asset Management Unit that uses proprietary risk analytics to identify hedge funds with suspicious returns. Performance that is flagged as inconsistent with a fund’s investment strategy or other benchmarks forms a basi......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Opalesque Roundtable: Emerging managers should avoid chasing 'institutional unicorns'[more]

    Bailey McCann, Opalesque New York: For managers looking to raise a new fund after the crisis, marketing efforts will need to be significantly different, according to delegates at the recent Opalesque Texas Roundtable. "Most of the smaller managers come to the whole fund-raising and marketing

  3. Cohen's private investments deliver strong 7.5% gain in Q1[more]

    From Reuters.com: Billionaire Steven A. Cohen's investments gained 7.5 percent in the first three months of 2015, according to a person familiar with the numbers, helping the former hedge fund manager extend his string of market-beating returns. Cohen's Point72 Asset Management, which invests

  4. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

  5. Opalesque Exclusive: Cyber security and hedge funds: increased awareness, Part One[more]

    Benedicte Gravrand, Opalesque Geneva: If you look at the recent cybersecurity news from Bloomberg, hackers are frightening the people: they steal photos and threaten to expose them, they can break into ATMs, they ha

 

banner