SEC v. Randal Kent Hansen, et al., Case No. 13-cv-01403 (S.D.N.Y.). On March 4, 2013, the SEC announced fraud charges related to two hedge funds — RAHFCO Funds LP and RAHFCO Growth Fund LP (the “RAHFCO Hedge Funds”). The SEC charged RAHFCO Management Group, LLC (“RAHFCO Management”), the general partner of RAHFCO Hedge Funds; its principal, Randal Kent Hansen; Hudson Capital Partners Corporation (“HCP”), the portfolio manager of RAHFCO Hedge Funds; and Vincent Puma, the principal of HCP, with securities fraud for their alleged involvement in a fraudulent scheme that raised more than $10 million. The SEC alleges that the RAHFCO Hedge Funds raised approximately $23.5 million before funds’ collapse in 2011. The SEC alleges Defendants’ scheme was to convince investors to invest in pooled investments that purportedly traded in options and futures on the S&P 500 Index and in equities. In reality, Defendants took investor money for their personal use. The Defendants are charged with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act. The complaint also alleges that Hansen and RAHFCO Management violated Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act and Rule 206(4)-8 and that Puma and HCP aided and abetted these violations. Finally, the SEC charged Hansen and RAHFCO Management with violating Section 15(a) of the Exchange Act by acting as unregistered broker-dealers. The SEC seeks injunctive relief, civil monetary penalties, and disgorgement plus prejudgment interest.
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