Fund Manager Charged With Multimillion-Dollar Scam

Fund Manager Charged With Multimillion-Dollar Scam - 1/21/2009

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HEADLINE NEWS:

Fund Manager Charged With Multimillion-Dollar Scam
Christine Caulfield

Securities Law 360. January 21, 2009
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EXCERPT: The U.S. Securities and Exchange Commission has taken a Texas hedge fund manager to court for allegedly embezzling millions of dollars in investors' money to live the high life of racing horses, luxury boats and an office swimming pool. The SEC filed a civil complaint Tuesday against RCS Hedge Fund and its principal, former bail bondsman and used car salesman Rod Cameron Stringer, in the U.S. District Court for the Northern District of Texas, claiming Stringer is still running his Ponzi scheme and has already defrauded at least a dozen investors, many of them elderly. […] The SEC claims Stringer has been running his fraudulent investment scheme since 2001 but commission investigators, with the help of the FBI, have centered their probe on his activities since January 2007. Since then, the SEC told the court, Stringer has raised at least $8.5 million from about 12 to 15 investors, about $1.5 million of which has been deposited into three securities brokerage accounts in his name. The whereabouts of the remaining funds is unknown, but the commission claims Stringer has blown considerable sums to fund a lavish lifestyle that includes thoroughbred racing horses, luxury cars, two houses, expensive jewelry and a pool in his office. According to the complaint, the 43-year-old Stringer, of Lamesa, Texas, has never held a securities license, is not registered with the commission in any capacity and was a used car salesman before turning his hand toward hedge fund management. Stringer allegedly tells investors that their money will be traded in stocks, bonds, futures, options and select currencies, and he falsely advises them that their earnings are not taxable until the funds are withdrawn, according to the SEC complaint.

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