Hedge Fund Hit With Side-Pocket Fraud Charges | FINalternatives

Hedge Fund Hit With Side-Pocket Fraud Charges | FINalternatives: "pair of hedge fund managers have been accused of using a side-pocket to conceal losses and overcharge investors.
The Securities and Exchange Commission said that PEF Advisors, run by Paul Mannion and Andrew Reckles, overvalued the hedge fund's investment in World Health Alternatives by more than a factor of 10. The Atlanta firm's Palisade Master Fund had about 20% of client assets invested in the company five years ago, when WHA announced that it was under investigation for accounting fraud.
PEF moved the WHA investment into a side-pocket as the stock's value plummeted by more than 90%. But according to the SEC, PEF continued to value the stake at $4.12 million, when it was worth $362,000, 'at most.'"