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SEC Charges Florida Investment Advisors in Hedge Fund Fraud

According to the Securities and Exchange Commission (SEC), a father-son investment team has been charged with securities fraud for their role in an extensive hedge fund fraud. It is alleged by the SEC that these men, Neil V. Moody and his son, Christopher Moody, both investment advisers in Sarasota, Florida, mislead investors concerning the financial condition of the three hedge funds they managed. The three hedge funds were, Valhalla Investment Partners L.P., Viking IRA Fund LLC and Viking Fund LLC. Additionally, the SEC claims that Moody and his son represented to individuals that they were in control of the funds’ investment and trading activities, when in fact they were not. The funds were alleged to actually be controlled by Arther G. Nadel.

Specifically, the SEC alleges that these men disseminated misleading information to investors misrepresenting the hedge funds’ investment returns and overstating the values of the funds by as much as $160 million. These misrepresentations were alleged to have been made in account statements, offering materials, and newsletters prepared by the Moodys. The SEC claims that the Moodys did not independently verify the figures given them by Nadel and failed to notice and/or appreciate the multiple red flags which should have caused them to more carefully review the information given them by Nadel. It should be noted that Nadel was charged with fraud last year by the SEC and his assets were frozen by an emergency court order.

Glenn Gordon, the Associate Director of the SEC’s Miami Regional Office, sums it up by stating that the Moodys “abdicated their responsibilities to investors and ignored warning signs that should have alerted them to the fraud that was occurring all around them.”

The SEC is seeking permanent injunctions against the Moodys, financial penalties for their acts, and to require the Moodys to disgorge any illegal gains. At this time, without any admission of guilt, the Moodys have agreed to permanent injunctions, preventing future securities fraud violations and they have agreed to not associate with any investment advisor for a period of five years.

Investors justifiably rely on information given them by their investment adviser. If the investment adviser provides misleading information, which causes damage to the investor, the investor may have a legal means to recover their losses. If you believe that you may be a victim of investment fraud, contact our office for a free consultation. You may also visit our website, www.dossfirm.com, for additional information.

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