SEC v. JOSEPH J. D’AMBROSIO, No. 1:25-cv-05884, Southern District of New York (July 21, 2025) — Complaint

SHELDON L. POLLOCK
ASSOCIATE DIRECTOR
Alison R. Levine
Ben Kuruvilla
Mary Kay Dunning
Alexandra W. Wang
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY 10004-2616
(212) 336-5599 (Kuruvilla)
[email protected]

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

JOSEPH J. D’AMBROSIO,

                                             Defendant.

COMPLAINT

25 Civ. 5884

JURY TRIAL DEMANDED

Plaintif f  Securities and Exchange Commission (the “Commission”), f or its Complaint
against Defendant Joseph J. D’Ambrosio (“D’Ambrosio”),  alleges as f ollows:
SUMMARY
1. For many years, Defendant D’Ambrosio orchestrated an investment fraud through
Hereford Holdings, L.L.C. (“Hereford”), an entity that he established to invest funds on behalf of
family and friends, but which he used instead to misappropriate   investor money for his personal
use.
2. Starting in January 1998, D’Ambrosio raised millions of dollars for Hereford
from approximately 19 investors.  By at least 2010, D’Ambrosio was taking money from

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Hereford to support his personal lif estyle.  All told, D’Ambrosio transferred approximately $5.5
million of Hereford’s money to himself.  He concealed his fraud by providing Hereford investors
false statements about the performance and value of their investments.
3. By December 2024, D’Ambrosio had drained Hereford of virtually all its money.
Consequently, D’Ambrosio could not meet investor redemption requests, and on or about
December 23, 2024, he self-reported his violative conduct to the Commission staff and other law
enforcement personnel.
VIOLATIONS
4. By virtue of the foregoing conduct and as alleged further herein, D’Ambrosio has
violated Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 (“Advisers
Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2), and 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R.
§ 275.206(4)-8 ].
5. Unless D’Ambrosio is    restrained and enjoined, he will engage in the acts,
practices, transactions, and courses of business set forth in this Complaint or in acts, practices,
transactions, and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
6. The Commission brings this action pursuant to the authority conferred upon it by
Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-9(e)].
7. The Commission seeks a f inal judgment: (a) permanently enjoining D’Ambrosio
from violating the federal securities laws and rules that this Complaint alleges that he has
violated; (b) ordering D’Ambrosio to disgorge all ill-gotten gains he received as a result of the
violations alleged here and to pay prejudgment interest thereon, pursuant to the Securities
Exchange Act of 1934 (the “Exchange Act”) Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C.

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§§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (c) ordering D’Ambrosio to pay civil money penalties
pursuant to Advisers Act Section 209(e) [15 U.S.C. § 80b-9(e)]; and (d)  ordering any other and
f urther relief  the Court may deem just and proper.
JURISDICTION AND VENUE
8. This Court has jurisdiction over this action pursuant to Advisers Act Section 214
[15 U.S.C. § 80b-14].
9. D’Ambrosio, directly and indirectly, has made use of the means or
instrumentalities of  interstate commerce or of  the mails in connection with the transactions, acts,
practices, and courses of business alleged herein.
10. Venue lies in this District under Advisers Act Section 214 [15 U.S.C. § 80b-14].
D’Ambrosio may be found in, is an inhabitant of, or transacts business in the Southern District of
New York, and certain of the acts, practices, transactions, and courses of business constituting
the violations of the federal securities law alleged in this Complaint occurred within this District,
including that, at all relevant times, D’Ambrosio resided in this District, and at least one victim
resided in this District.
DEFENDANT
11. Joseph J. D’Ambrosio, age 66, is a resident of Bronxville, New York.  At all
relevant times, D’Ambrosio was the managing member of Hereford, while simultaneously
serving as the president and managing member of Investment Adviser A, defined below, the
investment manager to several hedge funds in which Hereford was a limited partner.
D’Ambrosio is not registered with the Commission.  D’Ambrosio became a Chartered Financial
Analyst charter holder in 1994.

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OTHER RELEVANT INDIVIDUALS AND ENTITIES
12. Hereford is   a Delaware limited liability company established in November 1997,
whose principal place of business was Bronxville, New York.  D’Ambrosio established Hereford
as a fund for pooling investor monies for investment in securities, and he served as Hereford’s
managing member at all relevant times.  Hereford has never been registered with the
Commission.
13. Investment Adviser A is a Delaware limited liability company whose principal
place of business is New York, New York.  In March 2000, D’Ambrosio, along with a partner,
founded Investment Adviser A.  D’Ambrosio owns the majority of Investment Adviser A.
D’Ambrosio was the managing member and president of Investment Adviser A, which served as
the investment adviser to the general partner of hedge funds managed by Investment Adviser A:
Hedge Fund 1 from 2000-2010; Hedge Fund 2 from 2006-2010; and Hedge Fund 3 from 2011 to
the present.  Investment Adviser A was an SEC exempt reporting adviser from May 2022 until
April 2024; since May 2022, Investment Adviser A has been an exempt reporting adviser with
the State of New York.
14. Hedge Fund  3 is a Delaware limited partnership formed in 2011, whose principal
place of business is New York, New York.  It is not registered with the Commission.
D’Ambrosio was responsible for all investment decisions of Hedge Fund 3.  At its peak in 2024,
Hedge Fund 3 had about $22 million in assets under management.
FACTS
I. BACKGROUND
15. D’Ambrosio formed Hereford in 1997 to pool and manage investments from his
family and friends.

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16. D’Ambrosio, his wife, and his children’s trusts initially contributed to Hereford
approximately $750,000.
17. In addition to receiving his immediate f amily’s personal money for Hereford,
D’Ambrosio accepted money from friends and other family members, including his wife’s
parents, his childhood best friend, and his wife’s aunt.
18. According to Hereford Holdings’ Limited Liability Company Agreement
(“Hereford LLC Agreement”), Hereford’s mission was “to serve as a fund through which the
assets of [Hereford’s] Members [would] be utilized to invest, hold and trade in securities and
other f inancial instruments and rights relating thereto, either directly or indirectly.”
19. The Hereford LLC Agreement designated D’Ambrosio as Hereford’s “managing
member” and, thus, authorized D’Ambrosio, on behalf of Hereford, to, among other things,
“purchase, hold, sell, sell short and otherwise deal in securities;” “to open, maintain and close
bank accounts, borrow money against a pledge of assets and draw checks or other orders for the
payment of moneys;” “to open, maintain and close brokerage accounts;” and to “act for
[Heref ord] in all other matters.”
20. At all relevant times, as Hereford’s managing member, D’Ambrosio made all
investment decisions on behalf of Hereford.
21. None of the powers enumerated in the Hereford LLC Agreement authorized
D’Ambrosio to spend Hereford investor money for his personal use.
22. As president and managing member of Investment Adviser A, D’Ambrosio also
had sole responsibility for the investment decisions of Investment Adviser A.

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II. D’AMBROSIO’S FRAUDULENT SCHEME

A. Hereford Managed Money of D’Ambrosio’s Family and Friends

23. Starting in 1998, Hereford raised millions of  dollars f rom approximately 19
investors – all of whom were D’Ambrosio’s family members or friends.
24. Hereford did not charge its investors any fees to manage their money.
25. At the time they invested, D’Ambrosio represented to Hereford’s investors, both
orally and in writing, that he would invest their money in equities.
26. After the formation of Investment Adviser A, Hereford’s primary investment was
in    Investment Adviser A’s hedge funds: Hedge Fund 1 (from 2000 to its wind-down in 2010),
Hedge Fund 2 (from 2006 to its wind-down in 2010), and Hedge Fund 3 (from 2011 to
Hereford’s exit in 2023) (collectively, the “Hedge Funds”).
27. Investors, or limited partners, in the Hedge Funds included Hereford and other,
non-Hereford investors.
1

28. D’Ambrosio sent Hereford investors individualized, semiannual investor letters
(“Investor Letters”), which purported to report the value of the individual Hereford investments.
29. By 2011, when D’Ambrosio invested Hereford funds in Hedge Fund 3, Hedge
Funds 1 and 2 had been wound down, and their remaining assets had been distributed to their
limited partners (including Hereford).
30. Hereford made only one capital contribution to Hedge Fund 3 (in 2011), and it
made no additional capital contributions to Hedge Fund 3.

1
 The Commission does not allege in this Complaint that the non-Hereford investors in the Hedge Funds
were victims of D’Ambrosio’s fraud.

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B. D’Ambrosio Used Hereford Investor Money for His Personal Expenses
31. By at least 2010, D’Ambrosio was withdrawing investor money from Hereford to
pay his personal expenses, including his mortgage, real estate taxes, and travel.  D’Ambrosio
generally did so by writing checks from Hereford’s bank account to himself and depositing the
checks into his personal bank accounts.
32. When Hereford’s bank accounts lacked suf f icient cash to cover D’Ambrosio’s
personal expenses, D’Ambrosio liquidated Hereford’s equities holdings, including by causing
Hereford to request redemptions from the Hedge Funds.  Af ter the Hedge Funds wired Hereford
its redemption money, D’Ambrosio withdrew it from Hereford’s bank account and deposited it
into his personal bank accounts.
33. Although Hereford’s investors included D’Ambrosio, his wife, and his children,
D’Ambrosio did not attribute his cash withdrawals from Hereford to any particular investor and,
over time, he withdrew far more cash from Hereford than he and his immediate family had
invested in Hereford.
C. D’Ambrosio Made Misrepresentations to Investors about the Values of their
Investments in Hereford
34. D’Ambrosio f alsely represented to the Hereford investors the value of  their
holdings, calculating it as if  he had not withdrawn their money from the Hedge Funds.
35. For example, in February 2010, D’Ambrosio represented to an investor (“Investor
A”) that, due to the alleged positive performance of Hedge Funds 1 and 2 in 2009, the value of
her interest in Hereford had increased by 21.8%, to $1,990,286.  As D’Ambrosio knew or
recklessly disregarded, however, these NAV numbers were false because they included money
that D’Ambrosio had misappropriated from Hereford.

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36. In May 2016, D’Ambrosio wrote to another investor (“Investor B”), who had just
made an additional contribution to her Hereford capital account, “I received your check in
yesterday’s mail and will put the funds to work.  I feel very good about the way it’s been going
so far this year.  My research pipeline is full of good ideas.  I will give you the usual mid-year
update in a couple of months.”
37. Contrary to his May 2016 statement to Investor B, D’Ambrosio did not put
Investor B’s “funds to work.”  To the contrary, by May 2016, D’Ambrosio had already
withdrawn the vast majority of Hereford’s money, and no record exists of Hereford making any
investments with Investor B’s money.
38. By June 2016, D’Ambrosio had largely dissipated Hereford’s assets: Hereford
had approximately $150 in its bank account, approximately $43,000 invested in Hedge Fund 3,
and no other equity investments.
39. After June 2016, D’Ambrosio nonetheless continued to make false representations
to investors regarding the value and performance of  their investments.
40. For example, on August 2, 2016, D’Ambrosio sent an Investor Letter to
Investor A regarding “Heref ord Holdings, LLC Mid-Year 2016 Update,” which stated that “the
value of your interest in Hereford Holdings, LLC was $2,688,202, representing a -0.9% return
for the first six months of the year.”  That letter f urther stated, “We had a f airly strong f irst
quarter, followed by weakness in a few positions in May and June, as the market was roiled by
worries over the Brexit vote among other concerns.  Currently, investment sentiment is generally
positive, with the S&P 500 Index rising to all-time highs in July.”  D’Ambrosio knew or
recklessly disregarded that the NAV figure that he reported to Investor A was false because it far
exceeded the sum total of  Hereford’s assets at the time, which amounted to less than $50,000.

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41. After August 2016, D’Ambrosio continued to report fraudulently overstated NAV
f igures to Hereford’s investors by calculating them as if  he had fully invested their money in
Hedge Fund 3.  In fact, D’Ambrosio had not invested Hereford funds in Hedge Fund 3 since
2011 and continued to request from Hedge Fund 3 redemptions on behalf of Hereford.
42. By 2023, D’Ambrosio knew that he could not repay the amount of money that he
had misappropriated from Hereford but nonetheless continued to report to Hereford investors
NAVs and performance based on the false premise that he had f ully invested his investors’ funds
in the Hedge Funds.  Thus, as D’Ambrosio knew or recklessly disregarded, the NAVs he
reported to Hereford investors far exceeded Hereford’s actual assets.
43. For example, in a July 2023 Investor Letter to Investor A purporting to provide
mid-year 2023 results, D’Ambrosio f alsely wrote: “As of June 30, 2023, the value of your
interest in Heref ord Holdings, LLC was $9,878,208, representing a 9.2% increase since the end
of 2022.”  In fact, the actual value of Hereford’s total assets was approximately $50,000.
44. By December 31, 2023, Hereford’s capital account balance at Hedge Fund 3 was
zero, Hereford held only $675 in its bank account, and it held no other investments.
45. On January 25, 2024, D’Ambrosio reported 2023 end-of-year results to Investor
A, stating that, “the value of your interest in Hereford Holdings, LLC was $8,229,202,
representing a 9.0% decrease for the full year of 2023.”  In fact, the actual value of Hereford’s
total assets was less than $1,000.
46. In  2023, D’Ambrosio successfully convinced at least one investor (“Investor C”)
to refrain from redeeming his investment in Hereford.

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47. In July 2023, D’Ambrosio sent Investor C    a letter stating that the value of  his
Hereford investment was $928,907.  As D’Ambrosio knew or recklessly disregarded, that
$928,907 figure was false because it far exceeded all of Hereford’s money.
48. At the same time, D’Ambrosio f alsely advised Investor C    that Hedge Fund 3
would perform better in 2024, thus convincing Investor C   to    refrain from redeeming his Hereford
investment in 2023.
49. In f act, at the time he was communicating with Investor C, D’Ambrosio knew or
recklessly disregarded that Hereford lacked the money to meet Investor C’s redemption request.
50. In 2024, D’Ambrosio continued to misstate to Hereford’s investors the value of
their holdings.
51. For example, in July 2024, D’Ambrosio sent a mid-year report to Investor C,
which claimed that the NAV of Investor C’s investment had increased by 7.5% since year-end
2023.  In fact, no such increase had occurred b ecau se D’Ambrosio had depleted all of Hereford’s
money.
52. In November 2024, D’Ambrosio sent Investor C    a text message stating that the
NAV of Investor C’s investment was “up about 25% YTD,” which was likewise false.
53. Contrary to D’Ambrosio’s false statements to Investor C, in November 2024,
Hereford’s bank account held about $350, its capital account at Hedge Fund 3 reflected a zero
balance, and it held no other investments.

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III. D’AMBROSIO’S MISAPPROPRIATION
54. D’Ambrosio transferred a total of  approximately $5.5 million of Hereford money
to himself .
55. Beginning in 2011, D’Ambrosio recorded the amounts he had withdrawn from
Hereford as a “loan receivable,” updating the running tally at the end of each year through 2021,
as follows:
Year Loan Receivable
2011 $3,480,725
2012 $4,004,725
2013 $4,559,943
2014 $4,883,443
2015 $5,175,943
2016 $5,260,943
2017 $5,294,943
2018 $5,328,943
2019 $5,362,943
2020 $5,396,943
2021
2
 $5,430,943

56. D’Ambrosio spent the money that he withdrew from Hereford in various
unauthorized ways, including to pay his personal expenses.
57. D’Ambrosio thus used Hereford money to pay for, among other things, his
mortgage, real estate taxes, food, cars, and travel.
58. Between March 2015 and December 2024, D’Ambrosio misappropriated
approximately $390,000 from the Hereford investors, not including those who were members of
his immediate f amily.

2
 After 2021, D’Ambrosio stopped recording on a  spreadsheet th e a mounts that h e misapp ropria ted f rom  Heref ord.

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59. In late 2024, Hereford received approximately $2 million in redemption requests
from various of its investors.
60. Hereford lacked sufficient funds to f ulf ill the late 2024 investor redemption
requests because, by that time, D’Ambrosio had misappropriated all Hereford investor money for
his personal use.
61. On or about December 23, 2024, D’Ambrosio self-reported his f raudulent scheme
to law enforcement personnel, including the Commission staff, and he has since cooperated with
the Commission staf f  in its investigation of his misconduct.
62. On or about December 26, 2024, D’Ambrosio informed Hereford’s investors by
email that Hereford was unable to “process any redemption or withdrawal request” and was
“working collaboratively with relevant authorities.”
63. As of December 31, 2024, the only remaining Hereford asset was $325 in a bank
account (which charges a $25 monthly maintenance fee).
V. TOLLING AGREEMENTS
64. On March 13, 2025, D’Ambrosio entered into a tolling agreement, which tolled
the statute of limitations from March 13, 2025 through September 13, 2025.  The tolling
agreement specified a period of time in which “the running of any statute of limitations
application to any action or proceeding against D’Ambrosio authorized, instituted, or brought by
or on behalf of the Commission or to which the Commission is a party arising out of the
[Commission’s investigation of D’Ambrosio’s conduct], including any sanctions or relief that
may be imposed therein, is tolled and suspended.”  The tolling agreement further provides that
D’Ambrosio and any of his agents or attorneys “shall not include the tolling period in the
calculation of the running of any statute of limitations or for any other time-related defense

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applicable to any proceeding, including any sanctions or relief that may be imposed therein, in
asserting or relying upon any such time-related defense.”
FIRST CLAIM FOR RELIEF
Violations of Advisers Act Sections 206(1) and (2)

65. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 64.
66. At all relevant times, D’Ambrosio was an investment adviser under Advisers Act
Section 202(11) [15 U.S.C. § 80b-2(11)].
67. D’Ambrosio, by use of the mails or any means or instrumentality of interstate
commerce, directly or indirectly, has: (i) knowingly or recklessly employed one or more
devices, schemes, or artifices to defraud any client or prospective client, and/or (ii) knowingly,
recklessly, or negligently engaged in one or more transactions, practices, and courses of
business which operated or would operate as a fraud or deceit upon any client or prospective
client.
68. By reason of the foregoing, D’Ambrosio, directly or indirectly, singly or in
concert, has violated and, unless enjoined, will again violate Advisers Act Sections 206(1) and
(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)].
SECOND CLAIM FOR RELIEF
Violations of Advisers Act Section 206(4) and Rule 206(4)-8(a) Thereunder

69. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 64.
70. At all relevant times, D’Ambrosio was an investment adviser, under Advisers Act
Section 202(11) [15 U.S.C. § 80b-2(11)], to a pooled investment vehicle, as defined in Rule
206(4)-8(b) [17 C.F.R. § 275.206(4)-8(b)].

 14
71. D’Ambrosio knowingly, recklessly, or negligently (i) made one or more untrue
statements of a material fact or omitted to state one or more material facts necessary in order to
make the statements made, in light of the circumstances under which they were made, not
misleading, to any investor or prospective investor in the pooled investment vehicle, and/or (ii)
engaged in one or more acts, practices, or courses of business that were fraudulent, deceptive, or
manipulative, with respect to any investor or prospective investor in the pooled investment
vehicle.
72. By reason of the foregoing, D’Ambrosio, directly or indirectly, singly or in
concert, has violated and, unless enjoined, will again violate Advisers Act Section 206(4) [15
U.S.C. § 80b-6(4)] and Rule 206(4)-8(a)(2) thereunder [17 C.F.R. § 275.206(4)-8(a)(2)].
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectf ully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining D’Ambrosio and his agents, servants, employees, and attorneys
and all persons in active concert or participation with any of them from violating, directly or
indirectly, Advisers Act Sections 206(1), 206(2), and 206(4) [15 U.S.C. §§ 80b-6(1), 80b-6(2),
and 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8];
II.
Ordering D’Ambrosio to disgorge all ill-gotten gains that he received directly or
indirectly, with pre-judgment interest thereon, as a result of  the alleged violations, pursuant to
Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and
78u(d)(7)];

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III.
Ordering D’Ambrosio to pay civil monetary penalties under Advisers Act Section 209(e)
[15 U.S.C. §§ 80b-9(e) [15 U.S.C. § 77t(e)]; and
IV.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND
 The Commission demands a trial by jury.

Dated: New York, New York
July 17, 2025
/s/ Ben Kuruvilla
SHELDON L. POLLOCK
ASSOCIATE DIRECTOR
Alison R. Levine
Ben Kuruvilla
Mary Kay Dunning
Alexandra W. Wang
Attorneys f or Plaintif f
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
(212) 336-5599
[email protected]

SHELDON L. POLLOCK 
ASSOCIATE DIRECTOR 
Alison R. Levine 
Ben Kuruvilla  
Mary Kay Dunning 
Alexandra W. Wang 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY 10004-2616 
(212) 336-5599 (Kuruvilla) 
[email protected]  
 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
JOSEPH J. D’AMBROSIO,   
  
                                             Defendant.  
 
 

 
 
COMPLAINT 

   
25 Civ. 5884 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (the “Commission”), for its Complaint 

against Defendant Joseph J. D’Ambrosio (“D’Ambrosio”), alleges as follows: 

SUMMARY 

1. For many years, Defendant D’Ambrosio orchestrated an investment fraud through 

Hereford Holdings, L.L.C. (“Hereford”), an entity that he established to invest funds on behalf of 

family and friends, but which he used instead to misappropriate investor money for his personal 

use. 

2. Starting in January 1998, D’Ambrosio raised millions of dollars for Hereford 

from approximately 19 investors.  By at least 2010, D’Ambrosio was taking money from 

Case 1:25-cv-05884     Document 1     Filed 07/17/25     Page 1 of 15



   

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Hereford to support his personal lifestyle.  All told, D’Ambrosio transferred approximately $5.5 

million of Hereford’s money to himself.  He concealed his fraud by providing Hereford investors 

false statements about the performance and value of their investments.   

3. By December 2024, D’Ambrosio had drained Hereford of virtually all its money.  

Consequently, D’Ambrosio could not meet investor redemption requests, and on or about 

December 23, 2024, he self-reported his violative conduct to the Commission staff and other law 

enforcement personnel.  

VIOLATIONS 

4. By virtue of the foregoing conduct and as alleged further herein, D’Ambrosio has 

violated Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 (“Advisers 

Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2), and 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. 

§ 275.206(4)-8]. 

5. Unless D’Ambrosio is restrained and enjoined, he will engage in the acts, 

practices, transactions, and courses of business set forth in this Complaint or in acts, practices, 

transactions, and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

6. The Commission brings this action pursuant to the authority conferred upon it by 

Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-9(e)].  

7. The Commission seeks a final judgment: (a) permanently enjoining D’Ambrosio 

from violating the federal securities laws and rules that this Complaint alleges that he has 

violated; (b) ordering D’Ambrosio to disgorge all ill-gotten gains he received as a result of the 

violations alleged here and to pay prejudgment interest thereon, pursuant to the Securities 

Exchange Act of 1934 (the “Exchange Act”) Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. 

Case 1:25-cv-05884     Document 1     Filed 07/17/25     Page 2 of 15



   

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§§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (c) ordering D’Ambrosio to pay civil money penalties 

pursuant to Advisers Act Section 209(e) [15 U.S.C. § 80b-9(e)]; and (d) ordering any other and 

further relief the Court may deem just and proper.  

JURISDICTION AND VENUE 

8. This Court has jurisdiction over this action pursuant to Advisers Act Section 214 

[15 U.S.C. § 80b-14].  

9. D’Ambrosio, directly and indirectly, has made use of the means or 

instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, 

practices, and courses of business alleged herein. 

10. Venue lies in this District under Advisers Act Section 214 [15 U.S.C. § 80b-14]. 

D’Ambrosio may be found in, is an inhabitant of, or transacts business in the Southern District of 

New York, and certain of the acts, practices, transactions, and courses of business constituting 

the violations of the federal securities law alleged in this Complaint occurred within this District, 

including that, at all relevant times, D’Ambrosio resided in this District, and at least one victim 

resided in this District. 

DEFENDANT 

11. Joseph J. D’Ambrosio, age 66, is a resident of Bronxville, New York.  At all 

relevant times, D’Ambrosio was the managing member of Hereford, while simultaneously 

serving as the president and managing member of Investment Adviser A, defined below, the 

investment manager to several hedge funds in which Hereford was a limited partner.  

D’Ambrosio is not registered with the Commission.  D’Ambrosio became a Chartered Financial 

Analyst charter holder in 1994.   

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OTHER RELEVANT INDIVIDUALS AND ENTITIES 

12. Hereford is a Delaware limited liability company established in November 1997, 

whose principal place of business was Bronxville, New York.  D’Ambrosio established Hereford 

as a fund for pooling investor monies for investment in securities, and he served as Hereford’s 

managing member at all relevant times.  Hereford has never been registered with the 

Commission. 

13. Investment Adviser A is a Delaware limited liability company whose principal 

place of business is New York, New York.  In March 2000, D’Ambrosio, along with a partner, 

founded Investment Adviser A.  D’Ambrosio owns the majority of Investment Adviser A.  

D’Ambrosio was the managing member and president of Investment Adviser A, which served as 

the investment adviser to the general partner of hedge funds managed by Investment Adviser A: 

Hedge Fund 1 from 2000-2010; Hedge Fund 2 from 2006-2010; and Hedge Fund 3 from 2011 to 

the present.  Investment Adviser A was an SEC exempt reporting adviser from May 2022 until 

April 2024; since May 2022, Investment Adviser A has been an exempt reporting adviser with 

the State of New York.  

14. Hedge Fund 3 is a Delaware limited partnership formed in 2011, whose principal 

place of business is New York, New York.  It is not registered with the Commission.  

D’Ambrosio was responsible for all investment decisions of Hedge Fund 3.  At its peak in 2024, 

Hedge Fund 3 had about $22 million in assets under management.    

FACTS 

I. BACKGROUND 

15. D’Ambrosio formed Hereford in 1997 to pool and manage investments from his 

family and friends.   

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16. D’Ambrosio, his wife, and his children’s trusts initially contributed to Hereford 

approximately $750,000. 

17. In addition to receiving his immediate family’s personal money for Hereford, 

D’Ambrosio accepted money from friends and other family members, including his wife’s 

parents, his childhood best friend, and his wife’s aunt. 

18. According to Hereford Holdings’ Limited Liability Company Agreement 

(“Hereford LLC Agreement”), Hereford’s mission was “to serve as a fund through which the 

assets of [Hereford’s] Members [would] be utilized to invest, hold and trade in securities and 

other financial instruments and rights relating thereto, either directly or indirectly.”   

19. The Hereford LLC Agreement designated D’Ambrosio as Hereford’s “managing 

member” and, thus, authorized D’Ambrosio, on behalf of Hereford, to, among other things, 

“purchase, hold, sell, sell short and otherwise deal in securities;” “to open, maintain and close 

bank accounts, borrow money against a pledge of assets and draw checks or other orders for the 

payment of moneys;” “to open, maintain and close brokerage accounts;” and to “act for 

[Hereford] in all other matters.” 

20. At all relevant times, as Hereford’s managing member, D’Ambrosio made all 

investment decisions on behalf of Hereford.     

21. None of the powers enumerated in the Hereford LLC Agreement authorized 

D’Ambrosio to spend Hereford investor money for his personal use. 

22. As president and managing member of Investment Adviser A, D’Ambrosio also 

had sole responsibility for the investment decisions of Investment Adviser A.   

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II. D’AMBROSIO’S FRAUDULENT SCHEME 
 

A. Hereford Managed Money of D’Ambrosio’s Family and Friends 
 

23. Starting in 1998, Hereford raised millions of dollars from approximately 19 

investors – all of whom were D’Ambrosio’s family members or friends.  

24. Hereford did not charge its investors any fees to manage their money.  

25. At the time they invested, D’Ambrosio represented to Hereford’s investors, both 

orally and in writing, that he would invest their money in equities.  

26. After the formation of Investment Adviser A, Hereford’s primary investment was 

in Investment Adviser A’s hedge funds: Hedge Fund 1 (from 2000 to its wind-down in 2010), 

Hedge Fund 2 (from 2006 to its wind-down in 2010), and Hedge Fund 3 (from 2011 to 

Hereford’s exit in 2023) (collectively, the “Hedge Funds”). 

27. Investors, or limited partners, in the Hedge Funds included Hereford and other, 

non-Hereford investors.1   

28. D’Ambrosio sent Hereford investors individualized, semiannual investor letters 

(“Investor Letters”), which purported to report the value of the individual Hereford investments.  

29. By 2011, when D’Ambrosio invested Hereford funds in Hedge Fund 3, Hedge 

Funds 1 and 2 had been wound down, and their remaining assets had been distributed to their 

limited partners (including Hereford).  

30. Hereford made only one capital contribution to Hedge Fund 3 (in 2011), and it 

made no additional capital contributions to Hedge Fund 3.  

 
1 The Commission does not allege in this Complaint that the non-Hereford investors in the Hedge Funds 
were victims of D’Ambrosio’s fraud.   

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B. D’Ambrosio Used Hereford Investor Money for His Personal Expenses  

31. By at least 2010, D’Ambrosio was withdrawing investor money from Hereford to 

pay his personal expenses, including his mortgage, real estate taxes, and travel.  D’Ambrosio 

generally did so by writing checks from Hereford’s bank account to himself and depositing the 

checks into his personal bank accounts.   

32. When Hereford’s bank accounts lacked sufficient cash to cover D’Ambrosio’s 

personal expenses, D’Ambrosio liquidated Hereford’s equities holdings, including by causing 

Hereford to request redemptions from the Hedge Funds.  After the Hedge Funds wired Hereford 

its redemption money, D’Ambrosio withdrew it from Hereford’s bank account and deposited it 

into his personal bank accounts. 

33. Although Hereford’s investors included D’Ambrosio, his wife, and his children, 

D’Ambrosio did not attribute his cash withdrawals from Hereford to any particular investor and, 

over time, he withdrew far more cash from Hereford than he and his immediate family had 

invested in Hereford.   

C. D’Ambrosio Made Misrepresentations to Investors about the Values of their 
Investments in Hereford 

34. D’Ambrosio falsely represented to the Hereford investors the value of their 

holdings, calculating it as if he had not withdrawn their money from the Hedge Funds.   

35. For example, in February 2010, D’Ambrosio represented to an investor (“Investor 

A”) that, due to the alleged positive performance of Hedge Funds 1 and 2 in 2009, the value of 

her interest in Hereford had increased by 21.8%, to $1,990,286.  As D’Ambrosio knew or 

recklessly disregarded, however, these NAV numbers were false because they included money 

that D’Ambrosio had misappropriated from Hereford.   

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36. In May 2016, D’Ambrosio wrote to another investor (“Investor B”), who had just 

made an additional contribution to her Hereford capital account, “I received your check in 

yesterday’s mail and will put the funds to work.  I feel very good about the way it’s been going 

so far this year.  My research pipeline is full of good ideas.  I will give you the usual mid-year 

update in a couple of months.”    

37. Contrary to his May 2016 statement to Investor B, D’Ambrosio did not put 

Investor B’s “funds to work.”  To the contrary, by May 2016, D’Ambrosio had already 

withdrawn the vast majority of Hereford’s money, and no record exists of Hereford making any 

investments with Investor B’s money. 

38. By June 2016, D’Ambrosio had largely dissipated Hereford’s assets: Hereford 

had approximately $150 in its bank account, approximately $43,000 invested in Hedge Fund 3, 

and no other equity investments.   

39. After June 2016, D’Ambrosio nonetheless continued to make false representations 

to investors regarding the value and performance of their investments. 

40. For example, on August 2, 2016, D’Ambrosio sent an Investor Letter to 

Investor A regarding “Hereford Holdings, LLC Mid-Year 2016 Update,” which stated that “the 

value of your interest in Hereford Holdings, LLC was $2,688,202, representing a -0.9% return 

for the first six months of the year.”  That letter further stated, “We had a fairly strong first 

quarter, followed by weakness in a few positions in May and June, as the market was roiled by 

worries over the Brexit vote among other concerns.  Currently, investment sentiment is generally 

positive, with the S&P 500 Index rising to all-time highs in July.”  D’Ambrosio knew or 

recklessly disregarded that the NAV figure that he reported to Investor A was false because it far 

exceeded the sum total of Hereford’s assets at the time, which amounted to less than $50,000. 

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41. After August 2016, D’Ambrosio continued to report fraudulently overstated NAV 

figures to Hereford’s investors by calculating them as if he had fully invested their money in 

Hedge Fund 3.  In fact, D’Ambrosio had not invested Hereford funds in Hedge Fund 3 since 

2011 and continued to request from Hedge Fund 3 redemptions on behalf of Hereford. 

42. By 2023, D’Ambrosio knew that he could not repay the amount of money that he 

had misappropriated from Hereford but nonetheless continued to report to Hereford investors 

NAVs and performance based on the false premise that he had fully invested his investors’ funds 

in the Hedge Funds.  Thus, as D’Ambrosio knew or recklessly disregarded, the NAVs he 

reported to Hereford investors far exceeded Hereford’s actual assets.  

43. For example, in a July 2023 Investor Letter to Investor A purporting to provide 

mid-year 2023 results, D’Ambrosio falsely wrote: “As of June 30, 2023, the value of your 

interest in Hereford Holdings, LLC was $9,878,208, representing a 9.2% increase since the end 

of 2022.”  In fact, the actual value of Hereford’s total assets was approximately $50,000. 

44. By December 31, 2023, Hereford’s capital account balance at Hedge Fund 3 was 

zero, Hereford held only $675 in its bank account, and it held no other investments.   

45. On January 25, 2024, D’Ambrosio reported 2023 end-of-year results to Investor 

A, stating that, “the value of your interest in Hereford Holdings, LLC was $8,229,202, 

representing a 9.0% decrease for the full year of 2023.”  In fact, the actual value of Hereford’s 

total assets was less than $1,000. 

46. In 2023, D’Ambrosio successfully convinced at least one investor (“Investor C”) 

to refrain from redeeming his investment in Hereford.    

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47. In July 2023, D’Ambrosio sent Investor C a letter stating that the value of his 

Hereford investment was $928,907.  As D’Ambrosio knew or recklessly disregarded, that 

$928,907 figure was false because it far exceeded all of Hereford’s money.  

48. At the same time, D’Ambrosio falsely advised Investor C that Hedge Fund 3 

would perform better in 2024, thus convincing Investor C to refrain from redeeming his Hereford 

investment in 2023.   

49. In fact, at the time he was communicating with Investor C, D’Ambrosio knew or 

recklessly disregarded that Hereford lacked the money to meet Investor C’s redemption request. 

50. In 2024, D’Ambrosio continued to misstate to Hereford’s investors the value of 

their holdings.   

51. For example, in July 2024, D’Ambrosio sent a mid-year report to Investor C, 

which claimed that the NAV of Investor C’s investment had increased by 7.5% since year-end 

2023.  In fact, no such increase had occurred because D’Ambrosio had depleted all of Hereford’s 

money.  

52. In November 2024, D’Ambrosio sent Investor C a text message stating that the 

NAV of Investor C’s investment was “up about 25% YTD,” which was likewise false.    

53. Contrary to D’Ambrosio’s false statements to Investor C, in November 2024, 

Hereford’s bank account held about $350, its capital account at Hedge Fund 3 reflected a zero 

balance, and it held no other investments.   

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III. D’AMBROSIO’S MISAPPROPRIATION 

54. D’Ambrosio transferred a total of approximately $5.5 million of Hereford money 

to himself.   

55. Beginning in 2011, D’Ambrosio recorded the amounts he had withdrawn from 

Hereford as a “loan receivable,” updating the running tally at the end of each year through 2021, 

as follows:   

Year Loan Receivable 
2011 $3,480,725 
2012 $4,004,725 
2013 $4,559,943 
2014 $4,883,443 
2015 $5,175,943 
2016 $5,260,943 
2017 $5,294,943 
2018 $5,328,943 
2019 $5,362,943 
2020 $5,396,943 
20212 $5,430,943 

 

56. D’Ambrosio spent the money that he withdrew from Hereford in various 

unauthorized ways, including to pay his personal expenses.   

57. D’Ambrosio thus used Hereford money to pay for, among other things, his 

mortgage, real estate taxes, food, cars, and travel.   

58. Between March 2015 and December 2024, D’Ambrosio misappropriated 

approximately $390,000 from the Hereford investors, not including those who were members of 

his immediate family. 

 
2 After 2021, D’Ambrosio stopped recording on a spreadsheet the amounts that he misappropriated from Hereford. 

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59. In late 2024, Hereford received approximately $2 million in redemption requests 

from various of its investors. 

60. Hereford lacked sufficient funds to fulfill the late 2024 investor redemption 

requests because, by that time, D’Ambrosio had misappropriated all Hereford investor money for 

his personal use. 

61. On or about December 23, 2024, D’Ambrosio self-reported his fraudulent scheme 

to law enforcement personnel, including the Commission staff, and he has since cooperated with 

the Commission staff in its investigation of his misconduct. 

62. On or about December 26, 2024, D’Ambrosio informed Hereford’s investors by 

email that Hereford was unable to “process any redemption or withdrawal request” and was 

“working collaboratively with relevant authorities.”  

63. As of December 31, 2024, the only remaining Hereford asset was $325 in a bank 

account (which charges a $25 monthly maintenance fee).  

V. TOLLING AGREEMENTS 

64. On March 13, 2025, D’Ambrosio entered into a tolling agreement, which tolled 

the statute of limitations from March 13, 2025 through September 13, 2025.  The tolling 

agreement specified a period of time in which “the running of any statute of limitations 

application to any action or proceeding against D’Ambrosio authorized, instituted, or brought by 

or on behalf of the Commission or to which the Commission is a party arising out of the 

[Commission’s investigation of D’Ambrosio’s conduct], including any sanctions or relief that 

may be imposed therein, is tolled and suspended.”  The tolling agreement further provides that 

D’Ambrosio and any of his agents or attorneys “shall not include the tolling period in the 

calculation of the running of any statute of limitations or for any other time-related defense 

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applicable to any proceeding, including any sanctions or relief that may be imposed therein, in 

asserting or relying upon any such time-related defense.” 

FIRST CLAIM FOR RELIEF 
Violations of Advisers Act Sections 206(1) and (2) 

 
65. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 64.  

66. At all relevant times, D’Ambrosio was an investment adviser under Advisers Act 

Section 202(11) [15 U.S.C. § 80b-2(11)]. 

67. D’Ambrosio, by use of the mails or any means or instrumentality of interstate 

commerce, directly or indirectly, has: (i) knowingly or recklessly employed one or more 

devices, schemes, or artifices to defraud any client or prospective client, and/or (ii) knowingly, 

recklessly, or negligently engaged in one or more transactions, practices, and courses of 

business which operated or would operate as a fraud or deceit upon any client or prospective 

client. 

68. By reason of the foregoing, D’Ambrosio, directly or indirectly, singly or in 

concert, has violated and, unless enjoined, will again violate Advisers Act Sections 206(1) and 

(2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]. 

SECOND CLAIM FOR RELIEF 
Violations of Advisers Act Section 206(4) and Rule 206(4)-8(a) Thereunder 

 
69. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 64.  

70. At all relevant times, D’Ambrosio was an investment adviser, under Advisers Act 

Section 202(11) [15 U.S.C. § 80b-2(11)], to a pooled investment vehicle, as defined in Rule 

206(4)-8(b) [17 C.F.R. § 275.206(4)-8(b)].  

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71. D’Ambrosio knowingly, recklessly, or negligently (i) made one or more untrue 

statements of a material fact or omitted to state one or more material facts necessary in order to 

make the statements made, in light of the circumstances under which they were made, not 

misleading, to any investor or prospective investor in the pooled investment vehicle, and/or (ii) 

engaged in one or more acts, practices, or courses of business that were fraudulent, deceptive, or 

manipulative, with respect to any investor or prospective investor in the pooled investment 

vehicle.   

72. By reason of the foregoing, D’Ambrosio, directly or indirectly, singly or in 

concert, has violated and, unless enjoined, will again violate Advisers Act Section 206(4) [15 

U.S.C. § 80b-6(4)] and Rule 206(4)-8(a)(2) thereunder [17 C.F.R. § 275.206(4)-8(a)(2)]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining D’Ambrosio and his agents, servants, employees, and attorneys 

and all persons in active concert or participation with any of them from violating, directly or 

indirectly, Advisers Act Sections 206(1), 206(2), and 206(4) [15 U.S.C. §§ 80b-6(1), 80b-6(2), 

and 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]; 

II. 

Ordering D’Ambrosio to disgorge all ill-gotten gains that he received directly or 

indirectly, with pre-judgment interest thereon, as a result of the alleged violations, pursuant to 

Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 

78u(d)(7)]; 

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III. 

Ordering D’Ambrosio to pay civil monetary penalties under Advisers Act Section 209(e) 

[15 U.S.C. §§ 80b-9(e) [15 U.S.C. § 77t(e)]; and 

IV. 

Granting any other and further relief this Court may deem just and proper.  

JURY DEMAND 

 The Commission demands a trial by jury.  

 
Dated: New York, New York 

July 17, 2025 
/s/ Ben Kuruvilla             
SHELDON L. POLLOCK 
ASSOCIATE DIRECTOR  
Alison R. Levine 
Ben Kuruvilla  
Mary Kay Dunning 
Alexandra W. Wang 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street  
Suite 20-100 
New York, NY 10004-2616 
(212) 336-5599  
[email protected] 
  
  

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