Directors Financial Group, an Illinois hedge fund operated by Sharon Vaughn has been ordered to distribute its assets to investors - some $25 million - based on an SEC complaint filed last March.

The SEC accused Vaughn of defrauded clients in the by investing in a fraudulent prime-bank trading scheme, noting that Vaughn failed to perform adequate due diligence and neglected to disclose her trading strategy to investors. She followed this up by withholding and then submitting fraudulent documents to the SEC.

In addition to the order to dispense DFG's assets Vaughn will also pay a $200,000 penalty. The U.S. Attorney's Office for the Northern District of Illinois has also put forth indictments for the two promoters who sold Vaughn on the dodgy bank trading scheme in the first place.

Interestingly, Sharon Vaughn is the mother of actor Vince Vaughn.

More here on Vaughn, via Financial Alternatives.

-- MDT

Labels: Directors Financial Group, Fraud, hedge fund, homeland security, Sharon Vaughn, Vince Vaughn