A federal court judge has ordered former hedge fund manager Michael Lauer to pay a $500,000 civil penalty.
The order was issued Aug. 17, but only announced in a Securities and Exchange Commission news release Wednesday.
The SEC had asked that Lauer be ordered to pay $1 million.
However, in deciding how much he should pay, Judge Kenneth A. Marra, of the U.S. District Court for the Southern District of Florida, recognized that Lauer has already been ordered to pay more than $62 million in disgorgement and prejudgment interest, and that he still faces criminal charges.
Whether any money will be paid is questionable, given that Lauer claims he is destitute, according to the judge’s order.
In September 2008, Marra found Lauder guilty of defrauding investors out of more than $500 million between 1999 and 2002. The court found that Lauer’s gain from the fraud was $43.6 million, according to court documents.
In his 67-page order, the judge fond that Lauer had manipulated the prices of seven securities that were a large part of the funds’ portfolios, but failed to provide any basis for the exorbitant valuations and lied to investors about the hedge funds actual holdings.
The judge said in his order that Lauer’s actions, as head of Lancer Management Group and Lancer Management Group II, were "egregious, pervasive, premeditated and resulted in the loss of hundreds of millions of dollars in investors' funds."
Lauer, described by prosecutors as the architect of a $1.1 billion hedge fund fraud scheme, and five others were charged with manipulating the closing market price of thinly traded shell company securities to falsely inflate the value of the Lancer Group hedge funds.
In April, Eric Hauser, who was founder and primary manager of the Lancer Group, pleaded guilty to charges he participated in the stock manipulation scheme.
Click here to read the judge’s order.
This of course is a Rant. These too slick wall street guys fleecing the public finally get what they deserve. The part that worries me is that I'm not convinced that this is an isolated incident. I fear it's quite wide-spread.
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