Charlotte hedge fund manager, Lonny Scott Bernath, has been Charged by the Securities and Exchange Commission with defrauding investors in three hedge funds.
According to the SEC’s complaint, Bernath allegedly directed three funds managed by his investment advisory firm, Headline Investment Management, to make loans to and investments in illiquid real estate and business ventures which he also managed and in which he had personally invested.
The complaint also states that Bernath misrepresented these investment activities to the Funds’ investors and did not disclose them until 2013. The alleged fraud occurred between 2007 and 2011. The complaint further alleges that, from 2008 to 2011, Bernath periodically wrote down the value of these investments and loans, to the detriment of the Funds’ investors.
Without admitting or denying the SEC’s allegations, Bernath agreed to partially settle the case against him. Possible disgorgement of ill-gotten gains and a civil penalty could later be ordered by the court.
The foregoing information, which is publicly available, is being provided by The White Law Group.
If you invested in hedge funds managed by Lonny Bernath and would like to discuss your litigation options with an experienced securities attorney, please call The White Law Group at (312)238-9650 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.