Approximately 41 clients invested a total of $3.5 million in the two funds, the Hercules Hedgehog Fund and the Agrippa Fund, according to the regulator. More than half of these investors were "unsophisticated, non-accredited investors," according to the
Pangione testified that Cantella asked prime broker
"Allowing, even encouraging, agents to offer unregistered and high-risk hedge funds to unsophisticated investors will not be tolerated," Galvin said in a statement. Two months ago, he set a record in the non-regulated world of hedge funds by suing two brokers for advertising hedge funds to non-accredited investors.
A Cantella spokesman declined comment to Reuters, which was unable to reach either Pangione or Rassias.