•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Bailey McCann, Opalesque New York:

The SEC has brought charges against Minneapolis-based hedge fund manager, Steven R. Markusen for bilking investors out of fees and portfolio pumping. According to the complaint, the management fees earned by Archer Advisors LLC were shrinking due to the funds’ worsening performance. The firm’s owner Steven R. Markusen and an employee Jay C. Cope implemented a scheme to enrich themselves at the expense of investors in the funds.

Markusen routinely caused the funds to reimburse Archer for fake research expenses, and he eventually routed much of that money to his personal checking account and spent it on country club dues, boarding school tuition, and a Lexus among other luxury items. Furthermore, Markusen devised a way to essentially charge fund investors twice for the same fake research expenses.

The SEC’s complaint filed in federal court in Minneapolis also charges Markusen and Cope with conducting a separate scheme to manipulate the stock price of the funds’ largest holding in order to inflate the monthly returns reported to investors and conceal the true extent of the funds’ mounting investment losses.

According to the SEC’s complaint, the scheme enabled Markusen to secretly pay Cope’s salary with fund soft dollars rather than out of Archer’s coffers. Markusen and Cope disguised Cope’s $10,000 monthly salary payments as research ......................

To view our full article Click here