Business Fake hedge fund manager pleads guilty to securities fraud By Carleton English March 15, 2018 | 10:39pm Modal Trigger Shutterstock Phony Westchester hedge fund manager Michael Scronic may soon be trading in his high-flying lifestyle for a cell in the big house. see also Man busted for posing as hedgie investor in $19M Ponzi scheme Scronic, 46, on Thursday pleaded guilty to securities fraud, admitting that he defrauded 45 investors — many of them pals — out of $22 million while running his fake hedge fund from his home. In seven-plus years of running the scam, Scronic posted only one positive quarter, court papers reveal. This is despite Scronic’s claims of annual returns as high as 13 percent. “His fund was wholly unsuccessful, resulting in millions of dollars in losses,” Manhattan US Attorney Geoffrey Berman said in a statement. As late as June 30, Scronic claimed to manage $21.7 million even though his brokerage and bank accounts showed only $102,376. Investment losses totaled $15.7 million. “What wasn’t lost in the market, Scronic used for his own personal expenses,” Berman said. And those expenses were lavish, averaging $500,000 a year — including $12,275 a month in rent to his home in the wealthy enclave of Pound Ridge and $30,000 to Stratton Mountain Club in July as well as fees for other beach and country clubs. Scronic will be sentenced on July 9 and faces a maximum sentence of 20 years.
that is the main reason anyone selling 'securities' is registered. if his clients are friends, he doesn't need to registere with securities regulators. His friends probably trust the guy and didn't ask for any 'registration' papers etc. right and you don't need it? More like he 'embezzzled' or laundered 16 million dollars. for his 'friends' Anyone can solicit funds from the public and say they will invest the money. instead of taking the money and run! Hedge fund managers and anyone claming to be a investment advisor needs to be registered and bonded. clients funds are insured. his clients won't get any of the money back even he goes to jail for 5 years. and probably gets release in 2 years from club med prison.