Unregistered hedge fund Global Money Management (GMM) overstated its assets to investors and should be shut down immediately under emergency relief procedures, the Securities and Exchange Commission said in a filing Friday. A California judge partly granted the Commissions wish on Friday by issuing a temporary restraining order against the company.
Marvin I. Friedman, who controls both GMM and its parent company, LF Global Investments, is said to have lied to investors by estimating that his $11 million hedge fund businesses was actually worth between $60 million and $100 million. The filing charges he, GMM and LF Global have been misleading the investors since 1993.
Moreover, the SEC said Friedman has never disclosed his personal tale of disciplinary trouble, including that he was shunned from doing business with any member of the National Association of Securities Dealers ever again.
The restraining order, issued by District Judge Barry Moskowitz of the Southern District of California, will hold until March 25, at which time a hearing will determine whether an injunction should be issued. Beside an injunction and the emergency relief, the SEC said it is seeking civil penalties and disgorgement with prejudgment interest.