Press Release: SEC Brings Fraud Charges Against San Francisco Hedge Fund Manager
San Francisco hedge fund manager Alexander James Trabulse defrauded approximately 100 investors of $10 million by inflating the Fahey Fund’s returns by up to 200% through fabricated statements and misusing funds for personal luxuries, leading the SEC to charge him with securities fraud and seek disgorgement, penalties, and relief against associated entities.
The SEC charged Alexander James Trabulse with defrauding about 100 investors of $10 million by fabricating account statements that inflated the Fahey Fund’s returns by as much as 200%. He misappropriated fund assets to pay for luxury cars, a home theater system, his ex-wife’s overseas shopping allowance, and granted a relative unrestricted access to the fund’s bank accounts. The SEC alleges violations of federal antifraud and registration provisions and seeks disgorgement, civil penalties, and other relief, while naming several entities that received fraudulent proceeds as relief defendants.
Alexander James Trabulse, a San Francisco hedge fund manager, founded the Fahey Fund in 1997 and raised approximately $10 million from around 100 investors by falsely touting its performance. He sent investors fabricated account statements that inflated the fund’s returns by up to 200%, despite the fund’s actual performance being vastly different. Trabulse used investor money to finance personal expenses, including luxury cars, a home theater system, and an overseas shopping allowance for his ex-wife, while also giving a relative free rein to use the fund’s accounts for personal gain. To expand the fraud, he encouraged existing investors to serve as references for new investors, thereby luring additional victims through the illusion of legitimacy and profitability. The SEC filed charges in federal district court in San Francisco, alleging violations of the antifraud and registration provisions of federal securities laws. The Commission is seeking disgorgement of ill-gotten gains, civil penalties, and other equitable relief, and has named several entities tied to Trabulse as relief defendants who received assets derived from the fraud. This case underscores the SEC’s commitment to holding hedge fund managers accountable for deceptive practices and the misuse of investor funds.
Extracted insights
- $10.00M $10 million $10M–$100M
- person alexander james trabulse
- agency director of sec's division of enforcement
- agency director of sec's san francisco regional office
- person helane l. morrison
- company inflated account statements to investors in fahey fund
- person linda chatman thomsen
- agency Securities and Exchange Commission
- SEC charged Alexander James Trabulse with defrauding investors
- Alexander James Trabulse founded Fahey Fund in 1997
- Alexander James Trabulse raised $10 million from approximately 100 investors
- Alexander James Trabulse overstated Fahey Fund returns by as much as 200 percent
- Alexander James Trabulse misused fund assets to purchase cars and finance shopping sprees
- Alexander James Trabulse sent inflated account statements to investors in Fahey Fund
- Alexander James Trabulse violated antifraud and registration provisions of federal securities laws
- SEC seeks disgorgement, penalties, and other relief
- Linda Chatman Thomsen is Director of SEC's Division of Enforcement
- Helane L. Morrison is Director of SEC's San Francisco Regional Office
SEC Brings Fraud Charges Against San Francisco Hedge Fund Manager FOR IMMEDIATE RELEASE 2007-203 Washington, D.C., Sept. 26, 2007 - The Securities and Exchange Commission today charged a San Francisco hedge fund manager with defrauding investors by dramatically overstating the fund's profitability and misusing fund assets. The Commission alleges that Alexander James Trabulse sent account statements to investors in his Fahey Fund that inflated the fund's returns by as much as 200 percent, while using investor money to purchase cars and finance shopping sprees for his family members. "Trabulse betrayed the trust investors placed in him by fabricating performance figures and treating the hedge fund as if it were his own personal bank account," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "The Commission is determined to hold hedge fund managers accountable when they deceive investors." Helane L. Morrison, Director of the SEC's San Francisco Regional Office, added, "Trabulse encouraged his existing investors to serve as references for new investors. As a result, his false account statements not only lulled existing investors into believing their investments were hugely profitably, but lured new investors into the fraud." According to the Commission's complaint, filed today in federal district court in San Francisco, Trabulse founded the Fahey Fund in 1997 and raised about $10 million from approximately 100 investors. He told investors the fund invested in financial instruments like stocks, derivatives, and foreign currency. The complaint alleges that Trabulse lured investors by touting the fund's spectacular performance, when in reality the statements he provided to investors bore no relation to the fund's actual performance. The Commission also alleges Trabulse misused fund assets to pay for a wide variety of personal expenses, using the fund's bank account to pay for cars, a home theater system, and his ex-wife's overseas shopping allowance. He even gave one relative free reign to use the fund's bank accounts for personal use, according to the Commission. The Commission's complaint alleges Trabulse violated the antifraud and registration provisions of the federal securities laws, and seeks disgorgement, penalties, and other relief. The Commission also has named as relief defendants several entities associated with Trabulse that received assets through Trabulse's fraud. # # # For more information, contact: Helane L. Morrison Regional Director SEC's San Francisco Regional Office (415) 705-2450 Marc J. Fagel Associate Regional Director SEC's San Francisco Regional Office (415) 705-2449 Additional materials: Litigation Release No. 20300 http://www.sec.gov/news/press/2007/2007-203.htm Home | Previous Page Modified: 09/26/2007
SEC Brings Fraud Charges Against San Francisco Hedge Fund Manager FOR IMMEDIATE RELEASE 2007-203 Washington, D.C., Sept. 26, 2007 - The Securities and Exchange Commission today charged a San Francisco hedge fund manager with defrauding investors by dramatically overstating the fund's profitability and misusing fund assets. The Commission alleges that Alexander James Trabulse sent account statements to investors in his Fahey Fund that inflated the fund's returns by as much as 200 percent, while using investor money to purchase cars and finance shopping sprees for his family members. "Trabulse betrayed the trust investors placed in him by fabricating performance figures and treating the hedge fund as if it were his own personal bank account," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "The Commission is determined to hold hedge fund managers accountable when they deceive investors." Helane L. Morrison, Director of the SEC's San Francisco Regional Office, added, "Trabulse encouraged his existing investors to serve as references for new investors. As a result, his false account statements not only lulled existing investors into believing their investments were hugely profitably, but lured new investors into the fraud." According to the Commission's complaint, filed today in federal district court in San Francisco, Trabulse founded the Fahey Fund in 1997 and raised about $10 million from approximately 100 investors. He told investors the fund invested in financial instruments like stocks, derivatives, and foreign currency. The complaint alleges that Trabulse lured investors by touting the fund's spectacular performance, when in reality the statements he provided to investors bore no relation to the fund's actual performance. The Commission also alleges Trabulse misused fund assets to pay for a wide variety of personal expenses, using the fund's bank account to pay for cars, a home theater system, and his ex-wife's overseas shopping allowance. He even gave one relative free reign to use the fund's bank accounts for personal use, according to the Commission. The Commission's complaint alleges Trabulse violated the antifraud and registration provisions of the federal securities laws, and seeks disgorgement, penalties, and other relief. The Commission also has named as relief defendants several entities associated with Trabulse that received assets through Trabulse's fraud. # # # For more information, contact: Helane L. Morrison Regional Director SEC's San Francisco Regional Office (415) 705-2450 Marc J. Fagel Associate Regional Director SEC's San Francisco Regional Office (415) 705-2449 Additional materials: Litigation Release No. 20300 http://www.sec.gov/news/press/2007/2007-203.htm Home | Previous Page Modified: 09/26/2007