Just as two Bear Stearns hedge fund managers go to trial and face 20 years in prison, another investment manager gets hit with a serious conviction.
Michael Regan, an investment pool manager from Massachusetts, was sentenced to 84 months in prison, three years of supervised release and ordered to pay $8.9 million in restitution to his victims. Ouch.
In June, Regan plead guilty to securities fraud for a Ponzi scheme that defrauded investors in his “River Stream Fund” of $8.9 million.
Here’s the Dept. of Justice release from the plea:
DOJ: According to the charging information, Regan was the sole manager of the , which had more than 70 investors and which, Regan claimed before the fund’s April 2008 collapse, more than $18 million under management. Starting in or about 2001, Regan gave investors fraudulent account statements showing that the fund had annual returns of approximately 20 per cent.
River Stream actually lost money or achieved minimal returns from 2001 through April 2008. Regan paid more than $9 million in redemption requests to investors by using new investor funds and took more than $2.5 million in performance fees from River Stream even though he never achieved the minimum twelve per cent annual return required for him to be entitled to the fees. By the time River Stream collapsed, it had only $101,600 under management instead of the $18 million Regan reported to his investors.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.