Michael Lauer, the head of two Connecticut hedge funds, was ordered to pay more than $62 million to settle charges he defrauded investors of more than $500 million by manipulating securities prices and lying about the holdings of his funds, the Securities and Exchange Commission announced today.
Michael Lauer, the head of two Connecticut hedge funds, was ordered to pay more than $62 million to settle charges he defrauded investors of more than $500 million by manipulating securities prices and lying about the holdings of his funds, the Securities and Exchange Commission announced today.
Mr. Lauer, the head of Greenwich, Conn.-based Lancer Management Group and Lancer Management Group II, must pay more than $46.6 million to compensate for ill-gotten gains, in addition to more than $18.9 million in interest, the SEC said in a statement.
He raised more than $1.1 billion from investors over several years by misrepresenting the nature of returns on his investments. Investors lost about $500 million of that amount, the SEC said.
The SEC found Mr. Lauer liable on fraud charges last fall. Today’s order by the U.S. District Court for the Southern District of Florida gives the SEC 30 days to recommend a penalty that he should pay in addition to disgorgement and interest.
He has been criminally indicted in the case, and his trial is scheduled for next year.
“This is a victory for investors and a cautionary tale for hedge fund managers who line their pockets with ill-gotten gains,” David Nelson, director of the SEC’s Miami regional office, said in a release.
Mr. Lauer could not be reached for comment.