SEC Thanks Bermuda Monetary Authority
The US Securities & Exchange Commission [SEC] has publicly thanked the Bermuda Monetary Authority for its assistance in uncovering an alleged multi-million dollar fraud being run by a New York hedge fund.
British hedge fund manager Michael Balboa, 42, was arrested Thursday [Dec.1] in New York and charged with overvaluing the assets of the Millennium Global Emerging Credit Fund, where he worked, by more than $80 million.
Mr. Balboa, 42, “along with his co-conspirators, manipulated the valuation process at his former hedge fund to make it appear financially stronger than it really was and for his own personal gain,” the US Attorney’s Office said in a statement. “In so doing, he harmed the fund and deceived its investors.”
Among the charges he faces, the businessman is said to have provided “phony mark-to-market quotes” to the fund’s local auditor, Deloitte & Touche [Bermuda], Ltd. in order to inflate its overall net asset value.
Mr. Balboa was the hedge fund’s manager from December 2006 until October 2008, when it shut down, prosecutors said. He is charged with conspiracy to commit securities fraud and wire fraud, and one count each of securities fraud and wire fraud. He faces up to a total of 45 years in prison.
The SEC filed a parallel civil case on Thursday, against Balboa and Gilles De Charsonville.
The SEC claims: “Between January and October 2008, the Fund’s portfolio manager, Michael Balboa, enlisted two purportedly independent brokers, Gilles De Charsonville and another broker from a UK-based broker-dealer firm (‘Broker A’), to provide phony mark-to-market quotes for two of the Fund’s portfolio securities to the Fund’s independent valuation agent, GlobeOp Financial Services, Ltd. … and outside auditor, Deloitte & Touche [Bermuda], Ltd. … in order to inflate the Fund’s reported monthly returns and overall net asset value. …
“Balboa and De Charsonville hid their scheme from GlobeOp and Deloitte. At Balboa’s direction, De Charsonville and Broker A led GlobeOp and Deloitte to believe that the marks were authentic counter-party quotes. In reality, the marks were dictated by Balboa.”
Mr. De Charsonville, 49, is a French citizen who lives in Spain.
The SEC seeks penalties, disgorgement and an injunction
SEC’s investigations, which continue, were conducted by its New York Regional Office. effort.
The SEC acknowledged the assistance and cooperation of the BMA, the US Attorney, US Postal Inspection Service, UK Financial Services Authority, Comisión Nacional del Mercado de Valores, Guernsey Financial Services Authority, and Nigeria Securities and Exchange Commission.
Comments (1)
Trackback URL | Comments RSS Feed
Articles that link to this one: