A United States financial regulator has sued a Boston-based asset manager, alleging that he “schemed to defraud” investors into giving him money to place in a Virgin Islands-registered investment fund that doesn’t exist.
The US Securities and Exchange Commission filed a lawsuit last month against Andrey Hicks and Locust Offshore Management LLC, alleging that Mr. Hicks printed an offering memorandum, business cards and stationery and opened bank accounts for the Locust Offshore Fund.
“Not only does Locust Fund not exist as a BVI-incorporated company, but Hicks has transferred substantially all of the investors’ funds to bank accounts in his personal name and, on information and belief, for his personal use,” the lawsuit states.
Mr. Hicks used “false representations” to obtain $1.7 million from ten investors for shares in the fund, the lawsuit states. A US judge froze LOM’s assets and ceased its operations on Oct. 26, according to court records.
See the Nov. 3, 2011 edition for full coverage.