The US Securities and Exchange Commission has filed securities fraud charges against Nicholas Joseph Genovese. The regulator contends that the purported hedge fund manager and his Willow Creek Advisors LLC misappropriated at least six investors’ money to pay for securities trading in his own brokerage account. Now, the SEC wants a temporary restraining order to freeze assets and stop further alleged violations.
According to the Commission’s complaint, Genovese misrepresented his previous experience in the securities industry and as a money manager, as well as the size of his business, including, that he:
· Oversaw $4B of the assets belonging to the Genovese Drug Store family.
· Ran Willow Creek Investments LP with $30B-$39B of assets under management when that figure was closer to less than $10M.
· Falsely stated that he and Willow Creek Advisors employed up to 60 people when the reality was closer to under 10.
· Claimed that his hedge fund made 30-40% investment gains annually when losses where what were actually incurred.
· Hid is criminal history, including, according to news sources, past convictions for forgery and grand larceny.
· Did not tell investors he previously filed for bankruptcy.
· Touted an education and professional history that he’d fabricated, including that he was a former Goldman Sachs (GS) partner and an ex-Bear Stearns portfolio manager, as well as had earned an MBA from Dartmouth.
The SEC said that Genovese’s personal brokerage account, in which he was allegedly using investor funds to trade, saw more than $8M in losses from ’15 to ’17. He also is accused of spending investors’ money to fund his lifestyle, including spending about $263K to cover hotel and food expenses, pay for a driver to transport him around in a Bentley, and for cash withdrawals.
The regulator believes that Genovese may have been defrauding investors up until last month when $50K was moved into his own trading account. He also continued to refuse to pay back the redemption he owed one of the investors. It was also in January that investor Colony Capital Hills, LLC sued Genovese and his firms claiming a number of violations, including fraud.
Genovese claimed he was an heir and the grandson to Genovese Drug Store family founder Joseph Genovese, but he is not related to that family. He merely shares the same last name.
Hedge Fund Fraud
The SSEK Partners Group works with institutional investors and high net worth individual investors in fighting to recover their investments that were lost due to fraud. Contact our hedge fund fraud lawyers today.
Read the SEC Complaint (PDF)
More Blog Posts:
BNP Paribas to Pay $90M After Pleading Guilty in FX Currency Rigging Probe, Institutional Investor Securities Blog, January 31, 2018
Barclays Capital Trader is Indicted in Massive Front Running Scam, Institutional Investor Securities Blog, January 17, 2018
Multimillion-Dollar Investment Adviser Fraud Cases Target Widows, Older Investors, and Other Retail Investors, Stockbroker Fraud Blog, December 28, 2017