A California-based investment advisor allegedly defrauded investors by using a bogus auditing firm to verify his hedge fund's performance, according to the SEC. 

“An independent financial audit is one of the best protections available to investors,” according to Marc Fagel, director of the SEC’s San Francisco Regional Office. The advisor, James Michael Murray, “conjured up an accounting firm and deliberately faked the audit to induce investors into believing the fund was in better shape than it actually was.”

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