(CN) – The Securities and Exchange Commission made the right decision in barring a Texas man from associating with any investment adviser after he repeatedly overstated the value of hedge funds by more than $20 million, the D.C. Circuit ruled.
In July 2001, Conrad Seghers reported that the fund posted “respectable returns,” but three weeks later, he admitted to his lawyer that the funds were “in the toilet.”
Judge Henderson agreed with the SEC’s summary disposition of the case.
While Morgan Stanley reported incorrect hedge fund values to Seghers, he was aware of the error when he passed on those figures, Henderson ruled.
The judge was also unswayed by Seghers’ assertion that he did not gain financially and in fact lost his own money on the hedge funds.
“These facts, however, were undisputed and did not require a hearing,” Henderson ruled.
The judge also upheld the SEC’s ruling based on the Seghers’ refusal to take responsibility.
“Seghers made it clear to the SEC in his pleadings and affidavits that he contends he did not do anything wrong,” Henderson wrote.