Broker pleads guilty in hedge fund fraud

A former securities broker has pleaded guilty to charges he helped a prominent Manhattan lawyer dupe hedge funds into making bogus investments. The broker, Kosta Kovachev, entered the plea to conspiracy to commit securities fraud Monday in federal court in Manhattan. He admitted aiding lawyer, Marc Dreier, in a conspiracy to sell more than $100 million in fictitious securities to hedge funds in 2006 and 2007. The 58-year-old Kovachev faces up to 25 years in prison at a March 5 sentencing. Dreier is serving a 20-year prison sentence after pleading guilty to federal charges. Prosecutors say Kovachev and Dreier posed as representatives of a real estate developer — even using the developer's Manhattan offices — to sell phony promissory notes to hedge funds.