Offshore Investment fund alleged of providing false information

Federal Judge has frozen the assets and suspended the operations of Cambridge investment fund, Locust Offshore Management LLC. The founder of the fund, Andrey C. Hicks, is accused of lying to investors about the existence of an operation in the British Virgin Islands, and of giving false information about his Harvard education.

According to the civil suit filed in U.S. District Court by the Securities and Exchange Commission, the owner of the fund schemed “to defraud investors through the creation of a false and deceptive appearance of a legitimate, existing (British Virgin Islands)-incorporated pooled investment fund.” The lawsuit states that Locust Offshore Fund Ltd. raised at least $1.6 million since its launch in early 2011.

Hicks said, in his turn, that the fund is “absolutely” set up in the jurisdiction of the British Virgin Islands, and is investing money as it is advertised. On Offshore Management’s website, it is stated that Locust fund “develops and executes sophisticated quantitative strategies across asset classes to produce absolute, risk-adjusted returns with high alpha.” The promotional material on the site also informs that the firm is primarily engaged in the U.S. equity markets and adheres to a market-neutral, risk-averse trading philosophy.

Federal investigators allege in the court documents that the operation is a scam: “Not only does the Locust Fund not exist as a BVI-incorporated company, but Hicks has transferred substantially all the investors’ funds to bank accounts in his personal name and, on information and belief, for his personal use.”

This entry was posted in Frauds, Illegal actions, Management Fraud, Offshore investment schemes, Scam, Unethical business practice. Bookmark the permalink.

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