Investment adviser sentenced to more than 5 years in prison for securities fraud


    A South Carolina investment advisor charged by the Securities and Exchange Commission with perpetuating a decade of fraud against investors was Sentenced to more than five years in prison last week after pleading guilty to securities fraud in federal court.

    George Heckler was charged with the same conduct in New Jersey as that in the The SEC’s complaint was filed earlier this year. According to the Commission’s complaint, Heckler had set up a private hedge fund in 1998 to manage money for friends and family, with Heckler acting as an advisor, and by 2008 the fund had more than $ 34 million in investing capital.

    However, the Fund suffered huge losses in 2009 and further losses are likely. Heckler didn’t tell investors about the fund’s troubles, but instead set up the Cassatt Short Term Trading Fund and the CV Special Opportunity Fund, two separate hedge funds, to hide those losses so that investors in the failing fund would try to reclaim their money. From 2011 to 2019, Heckler raised at least $ 90 million from investors, ostensibly for these two funds.

    Heckler told investors that their funds would be used for short-term stock trading that would generate returns. But more than a third of the money raised was never invested; according to the SEC, it was used to repay existing investors and for Heckler’s debts. In September 2014, an unnamed investor invested around $ 9.1 million in the Cassatt Fund.

    “Heckler did not inform Investor A that Cassatt no longer had any open broker accounts or other direct trading opportunities at the time of this investment,” the complaint said. “Rather than dedicating Investor A’s investment to trading in securities, Heckler uses $ 4.6 million of Investor A’s money to repay existing CV Special investors and the remainder to meet other obligations he has no connection with Cassatt owes. “

    In another case, another unnamed investor, who also worked as an investment advisor and hedge fund manager, decided to set up a new hedge fund that would invest its capital through a separate fund controlled by Heckler. By July 2016, this investor had approximately $ 10.1 million in Heckler’s funds, but those investments were never used to trade the strategy agreed by the advisors; instead, he used the funds to settle debts and make principal payments to an institutional investor with funds from Heckler’s Cassatt fund.

    Throughout the scam, Heckler has been covering this up by offering investors fake bank statements of fabricated profits, according to the SEC.

    Overall, according to the Justice Department, Heckler had raised about $ 1 million in fees and distributions for his own use. In addition to the 63-month prison term, Heckler was also sentenced to three years of supervised release and sentenced to $ 19.25 million. The SEC’s lawsuit against Heckler is ongoing.


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