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Alternative Market Briefing

SEC brings fraud charges against managers of Connecticut hedge fund New Stream Capital

Wednesday, February 27, 2013

Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has brought formal charges against the managers of Connecticut-based hedge fund New Stream Capital. The charges say that investors were lied to when managers David Bryson and Bart Gutekunst secretly revised the fund’s capital structure before it collapsed in order to placate its largest investor, Gottex Fund Management. Bryson and Gutekunst then directed New Stream’s marketing department to continue marketing the hedge fund as though all investors were on the same footing when in fact Gottex had priority over other fund investors in the event of the fund’s liquidation. The fund had over $1bn AUM in 2008, but then faced a big redemption from Gottex which later forced its collapse.

The SEC additionally charged New Stream’s former chief financial officer Richard Pereira and former head of investor relations Tara Bryson, who is David Bryson’s sister. She agreed to settle the SEC’s charges. Tara Bryson was originally arrested in 2010, while serving as the head of investor relations at New Stream for running an illegal pot-farm out of her home in Newtown, Connecticut. She avoided jail time for those charges. According to a 2010 report from Hedgetracker, Tara played a key role in explaining t......................

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