For years, and indeed as recently as earlier this year, venture capital firms threw money hand over first at a company called NS8. This made a certain amount of sense, insofar as NS8 was a promising player in the ever-growing field of cyber-fraud prevention. But, in one of those delightful turns of events, what they were apparently financing was a fraud in and of itself, as their decision to buy $17.5 million worth of shares from founder Adam Rogas was based on allegedly bogus financials provided to them by Rogas.

Does it end there? Reader, it does not, for the situation has created a new opportunity for one hedge fund.

Investment firm Invictus Global Management LLC has extended a loan to finance the planned litigation, aimed at recovering lost funds for victims of the alleged fraud that brought down NS8…. The chapter 11 case creates an avenue for NS8 to seek the return of funds it paid out when it appeared financially healthy but actually wasn’t. The bulk of potential value left in NS8 comes from these legal claims, according to a person familiar with its finances.

Fraud-Detection Startup NS8 Files for Bankruptcy, Paving Way for Litigation [WSJ]


By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

Older Brother Sells Out Younger Brother In Alleged Crypto Hedge Fund Fraud, But Notes That Real Villain Is SEC

If they’d just unfreeze those assets, his little bro would quickly get them back to his alleged victims, he’s pretty sure.

By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

Former Hedge Fund Manager Self-Fulfills Prison Prophecy

Dan Kamensky may go from predicting jailtime to getting it in less than a year.


Global Pandemic To Evolve Into Epidemic Of Fraud Lawsuits

When the going gets tough, those in a tough spot cheat, according to eager lawyers.

(Getty Images)

SEC, Which Saw No Evidence Of Hedge Fund’s Fraud At First Glance, Sues Hedge Fund For Fraud

TCA Fund Management preferred the old, lazy, whistleblower-hating SEC.

By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

Allegedly Fraudulent Hedge Fund Counters Fraud Allegations With Award Won Through Alleged Fraud

Goldsky Asset Management may have no assets, but it does have hardware.


Hotlanta A Hotbed Of Hedge Fund, Private Equity Fraud

Allegedly. What I can tell you from on-the-ground reporting is that it is also very, very hot in a literal sense.