Perhaps it is more important to call this one a "phoney" hedge fund, as it doesn't appear the proprietors of HMC, Robert Massimi and Bret Grebow had any intent to do anything but fund their own retirement. Curiously...news of the SEC action hasn't yet made it to the top of the heap on HMC's "news page."

Via Reuters:

SEC charges hedge fund managers with fraud

December 22, 2005
Reuters

U.S. financial regulators charged the founders of a $12.9 million (7.4 million pound) hedge fund with fraud on suspicions they stole roughly half of the money from roughly 80 investors to spend on themselves.

The U.S. Securities and Exchange Commission said it filed an emergency enforcement action charging that Robert Massimi and Bret Grebow, who founded HMC International, raised the $12.9 million through a "fraudulent offering of investments." The government also charged the pair misappropriated more than $5.2 million for their own use. The fund, based in Montvale, New Jersey, collapsed this fall when the pair could not return money to several investors who wanted to leave.

On their Web site, the team said the fund was a pure stock trading fund and that its trading strategy made the investments relatively "insensitive to world events, overall market events and such events as corporate fraud or terror warnings."

The SEC also charged Jaime Elliott, Massimi's wife, because Massimi diverted some money to her after investors and the government began probing the fund. This is the latest in a series of fraud cases involving funds in the $1 trillion hedge fund industry.

The original article appears here.

And in happier times, here's a snippit from shaggy-maned HMC co-honcho Bret Grebow bragging in the Wall Street Journal about his big-spending ways (quote originally from the WSJ and found here):

"A year ago, Bret Grebow, a 28-year-old who runs hedge fund HMC International, was taking cheap flights on JetBlue Airways and keeping a lid on his spending. But his fund's investment portfolio surged nearly 40 percent last year, and Grebow says he's confident that the market has regained its footing. So two months ago he bought a new $160,000 Lamborghini Gallardo. He says it was his first "treat" in months.

These days when Grebow and his girlfriend travel between his Highland Beach, Fla., home and his New York office, he charters a catered plane with a bar, paying as much as $10,000 for the three-hour flight. Last weekend he spent more than $12,000 to fly himself and some friends on a Learjet 55 to the Super Bowl."

Comments sure to haunt him.

-- MDT

Labels: Bret Grebow, HMC International, Robert Massimi