SEC Whacks Florida Hedge Fund Adviser

     MIAMI (CN) - A West Palm Beach hedge fund adviser and its president drained more than $17 million from a hedge fund they managed, the SEC claims in a settled complaint.
     The SEC on Monday sued Weston Capital Asset Management, its founder and president Albert Hallac, its former general counsel Keith Wellner, and sued Hallac's son, Jeffrey Hallac, as a relief defendant, in Federal Court.
     Albert Hallac and another man "later pocketed some of the transferred investor proceeds to enrich themselves," the SEC said in a statement announcing the lawsuit.
     The complaint states: "Beginning in August 2011, Weston Capital Asset Management LLC and its principal Albert Hallac perpetuated a fraud at a cost of more than $17 million to a hedge fund they manage. Under a purported swap transaction with a consulting and investment firm known as Swartz IP Services Group Inc., they drained the Weston-managed hedge fund Wimbledon Fund SPC ('Wimbledon') Class TT Segregated Portfolio ('TT Portfolio').
     "Hallac authorized money transfers to Swartz IP in contravention of the investment strategy and objective of the TT Portfolio without conducting any due diligence into Swartz IP or its intended investments. Weston's general counsel, Keith Wellner, knew about the TT Portfolio transfers and assisted Weston and Hallac's fraudulent activities. Further, Hallac, his son Jeffrey Hallac, and Wellner collectively received $750,000 from Swartz IP. This money was investor money dedicated to the TT Portfolio which had been transferred to Swartz IP.
     "Despite the fact that Weston and Hallac drained the TT Portfolio almost dry, TT Portfolio investors continued to receive account statements falsely reflecting their investment was performing as well, if not better, than before."
     Wellner and Jeffrey Hallac each agreed to disgorge $120,000, the SEC said in a statement.
     Sanctions for Weston Capital and Albert Hallac have yet to be determined.