SEC Charges Hedge Fund Manager with $38 Million Fraud
Andrew Franzone allegedly used misappropriated funds to buy an airplane hangar for his race car collection.
The US Securities and Exchange Commission (SEC) has charged the owner of an investment adviser firm with fraudulently raising and misappropriating more than $38 million from approximately 90 investors from the sale of limited partnership interests in a private fund.
According to the SEC’s complaint, Andrew Franzone defrauded investors by making misrepresentations regarding the strategy and investments of a private fund called FF Fund I LP. The regulator alleges Franzone misappropriated fund assets, failed to eliminate or disclose conflicts of interest, and falsely represented the fund would be audited annually. Franzone allegedly told potential and existing investors that his investment strategy for the fund was to maintain a highly liquid portfolio that was mainly focused on options and preferred stock trading.