NEW YORK (HedgeWorld.com)--The U.S. Securities and Exchange Commission amended its complaint against Burton G. Friedlander and related companies to include allegations of a US$2 million fraud.
A statement from the SEC accuses Mr. Friedlander of converting more than US$2 million in investor money from a pooled fund he managed toward personal and business use. Related to that, the SEC also alleges that he produces false asset reports that included the unauthorized use of KPMG LLP's letterhead.
Mr. Friedlander's attorney, William M. Pinzler, said that Mr. Friedlander pleaded not guilty to the charges. He declined further comment. Mr. Friedlander couldn't be reached for comment.
Mr. Friedlander previously was charged by the SEC in 2001 with inflating investment performance by overstating the value of selected securities through the use of pump-and-dump tactics . Similar accusations were made against Michael Lauer and his firm Lancer Management Group, Stamford, Conn., earlier this year .
The SEC's latest charges allege that Mr. Friedlander misled investors as to the value of their investments in a pooled fund he managed over the course of three years, from 1998 to 2000. Mr. Friedlander began converting investor money to personal use beginning in 1998, using it for personal expenses such as country club dues, personal legal fees relating to a divorce, maintenance and dockage fees for a sailboat and condominium fees, the complaint charges.
He also is accused of using new investments in the fund to pay off old investors looking to redeem, a classic pyramid scheme technique.
The complaint is field in U.S. District Court, Southern District of New York.