In Retrospect Maybe It Was Slightly Suspect That Supposedly Legit Hedge Fund Manager Had A Habit Of Tweeting "Ching!" When A Trade Made Money, Employed A Single Analyst Whose Finance Background Was Limited To Work As A Bank Teller

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Yesterday afternoon, the SEC and the Department of Justice charged hedge fund manager, YouTube star, and prolific Tweeter Anthony Davian with fraud. Like any good alleged Ponzi schemer, Davian applied the "one pot of money" philosophy to his funds' assets, and used investor cash to buy himself an Audi Q7 Prestige, build a palace the likes of which Akron, Ohio had never seen, and collect rare pens. As is typical in these kinds of cases, the benefit of hindsight allows those who witnessed the crime unfold in real time (clients, employees, etc) say "Well, of course it was a scam," even if it wasn't readily apparent at the time. Although not for a lack of trying on Davian's part! Behold, the amazing list of red flags he dangled in people's faces (uncovered by reporter Roddy Boyd), all but begging them to pause and say "Hey wait second, would a hedge fund manager running a legitimate and successful shop..."

  • Lie about having graduated from the University of Akron, which, according to public records, had "a $2,221 lien in place on his assets...for nonpayment of unspecified debts"?
  • Describe himself, in a YouTube video, as a "Financial Rockstar"?
  • Brag (in another YouTube video) that he was making so much money "much of his time was spent 'golfing and fishin'"?
  • Claim trading was so easy for him that it had become boring, and in order to stave off said boredom, start a newsletter (the Davian Letter), in which he shared his trading ideas to subscribers for $79/month?
  • More or less guarantee “high 20 percent or mid-30 percent” returns, in yet another YouTube clip?
  • Take to Twitter to tweet “Ching!” every time he made a profitable trade?
  • Take to Twitter, YouTube, and Facebook to "deride graduates of high-profile universities and graduate schools, arguing that their very academic training made them 'smidiots,' and vowing never to hire them?"
  • Employ but 2 people at his firm; an accountant-- who was "prohibited from accessing or monitoring the firm's accounts, as was the third party administrator that generated client statements"-- and an analyst who "worked as a bank teller three months before joining the fund"?
  • Throw a party for clients at which most of the attendees ended up not being clients but "people invited by Davian from his Twitter following"?
  • Suddenly and with no explanation, tell prospective investors that the fund had $5 million in assets under management, when just recently he'd been telling people it was $200 million?
  • Email a reporter on July 9 to explain missing a phone interview on July 8 by claiming he was "recovering from a near death experience" that'd left him on life support through July 10, declining to explain "how he was able to send an email from his iPad on July 9?

Eventually people did pause to say "Hey wait a sec," including the accountant who wasn't permitted to do any accounting. He forwarded some files to Jimmy Carter's son (founder of Carter Capital), who got the authorities on the horn. According to Davian nothing improper ever occurred at the fund. He has also told investors that the last quarter was a profitable one, "although June's results are still being tabulated."

The Erstwhile Hedge Fund King of Akron, Ohio’s Very Difficult Summer [SIRF / Roddy Boyd]
SEC v. Anthony Davian, Davian Capital Advisors [SEC]
SEC Sues Hedge Fund Manager For Stripping Co. Coffers [Law360]

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