• Adviser Sanctioned for Misleading Investors Regarding Investment Strategy and Performance
  • February 8, 2016
  • Law Firm: Sutherland Asbill Brennan LLP - Washington Office
  • The SEC brought charges against an investment adviser and its owner for misleading investors about the investment strategy and historical performance of a hedge fund they managed. The SEC alleged that QED Benchmark Management L.L.C. and its owner Peter Kuperman represented to investors that the fund would follow a methodical stock selection strategy. Instead, the fund deviated from the strategy and incurred heavy losses. In addition, QED and Kuperman provided information about the fund’s performance to investors that was misleading and that contained a combination of actual and hypothetical returns. The SEC also charged QED and Kuperman with failing to provide accurate information about the fund’s liquidity when investors attempted to redeem their interests in the fund.

    Without admitting or denying the allegations, QED and Kuperman agreed to settle the charges. In addition to consenting to the entry of a cease and desist order, QED and Kuperman agreed to reimburse investors for losses in the amount of $2.877 million. Additionally, Kuperman agreed to pay a $75,000 civil penalty and to be barred from the securities industry.

    The SEC’s order is available at https://www.sec.gov/litigation/admin/2016/33-10009.pdf.