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Fishy Hedge Fund Gets Hooked By CFTC

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Piranhas are nasty little fish known for their sharp teeth and an aggressive appetite for meat and flesh. And today the Commodity Futures Trading Commission announced that it had hooked one of the little buggers.
In a case first brought by the the CFTC in May, a federal court in California has fined Robert Joseph Beasley and his firm, Longboat Global Funds Management, for committing fraud by misrepresenting certain investments held by his commodity pool, Piranha Capital. The CFTC claimed the defendants had Piranha Capital loan $4 million to other Beasley controlled entities without letting investors know that Beasley was running them. They say Beasley misled investors about the security of the loans, and then didn’t collect interest or principal on them. He then allegedly used the value of the unpaid interest payment to calculate his fees. Nice work if you can get it. And not get caught.
The order imposes restitution totaling $13.8 million, of which Beasley is responsible for $4.5 million. The order also requires Beasley to pay a $500,000 civil monetary penalty and Longboat to pay a $1 million penalty.
“One has to wonder about a firm that names itself after a flesh eating fish,” the hedge fund newsletter FinAlertnatives quips.
CFTC Press Release [CFTC]
CFTC Fines ‘Fishy’ Hedge Fund Firm For Fraud [FinAlternatives]