LOS ANGELES (CN) - The SEC has frozen the accounts of two hedge funds that Bradley Ruderman claimed held more than $800 million in assets, though there was actually less than $1 million remaining, according to the federal complaint. Ruderman took $38 million from investors and made at least one Ponzi-type payment in running his Ruderman Capital Partners hedge funds, paying off old investors with new money, the SEC says.
"Ruderman was willing to say or do anything to persuade investors to entrust their money to him, particularly when his scheme was unraveling," said Rosalind R. Tyson, director of the SEC's Los Angeles regional office. "Ruderman's fabricated account statements presented a rosy picture for investors who were cajoled into believing these hedge funds were well-capitalized and experiencing significant gains rather than major losses."
The Ponzi payment came this year when an investor wanted $750,000 back, and Ruderman could pay it only after getting two deposits of $500,000 each from new investors, the SEC said.
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