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SEC shuts down $11-million Ponzi scheme
NEW YORK |
NEW YORK (Reuters) - Regulators have charged a New York fund manager who was running an $11-million Ponzi scheme, federal court filings showed.
The Securities and Exchange Commission charged Jason Konior with defrauding investors by promising to match their investments in his fund many times over. In reality, he used $2 million of the money he collected to pay his own expenses and to cover redemption requests from previous investors, according to the SEC's complaint, dated Thursday.
Konior's lawyers did not immediately respond to requests for comment.
Konior advertised his Absolute Fund LP as a $220 million vehicle that would combine its principal with new investors' contributions, and put the money into brokerage accounts that investors could use to trade securities, the SEC said.
If an account lost money, its investor would initially be on the hook, until his or her contribution was exhausted. If the account earned profits, they would be split between the individual investor and Absolute.
Konior collected $11 million from at least four different investors starting last November, telling them Absolute would put up as much as nine times their original contributions.
Not only did Absolute fail to match the funds it collected, it also didn't return the investors' money when they asked to withdraw it.
"Absolute's current assets represent only a fraction of the amount needed to repay its current investors," the SEC's complaint read.
(Reporting by Emily Flitter. Editing by Bernadette Baum)
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