Hedge Fund Fraud
At Sadis & Goldberg, we represent institutional investors as well as individual high net worth investors who have been the victims of hedge fund fraud. Although hedge funds are complex investment tools rendering investors vulnerable to fund managers that neglect their fiduciary responsibilities, some hedge funds are guilty of defrauding their own investors by reallocating profits to preferred clients and using misleading statements about the risk parameters associated with the fund. Ponzi schemes also involve defrauding investors by promising them dividends from money contributed by other investors and then never seeing a cent.
What are the signs of hedge fund fraud?
- Prior investor complaints or litigation history
- Pressure to invest or assurances that the hedge fund is “completely safe”
- A lack of regular audits by an independent accounting firm
- Unusually good performance over the long term, especially in a poor market