.FEDS CHARGE LANCER WITH FRAUD, SEIZE ASSETS
By CHRISTOPHER BYRON
July 11, 2003 -- Federal regulators have seized the assets of New York's Lancer Group of hedge funds, charging the Park Avenue money group with a broad array of fraudulent activities. The Lancer Group, headed by a onetime Wall Street analyst named Michael Lauer, was the subject of a series of stories in The Post that questioned the group's accounting practices and its involvement with known white-collar criminals. Lancer and Lauer are suing The Post for libel.
The federal action, which came yesterday by a Miami federal court on an emergency petition by the Securities and Exchange Commission, blocks Lauer and his group from access to any of the fund's assets prior to a court hearing next week on a variety of SEC charges.
The regulators assert that the Lancer fund group, which recently claimed to have assets of more than $1 billion under management, has been engaged for more than the last three years in a scheme to fraudulently inflate the performance and stated values of certain "virtually worthless" assets on the group's books.
The regulators assert that the group accomplished this by "systematically manipulating" month-end closing prices of various stocks held by the group.
The regulators also charge that the group provided "unfounded and unrealistic valuation opinions" to its auditors as well as made numerous false and misleading statements in its marketing materials.
The SEC charges that Lauer, who races sports cars and has produced several recent Hollywood movies, is the "control person" for the group.
The regulators are seeking an accounting of the group's assets, plus the imposition of fines and a permanent injunction against further fraud.
Another of Lancer's other top people, Bruce Cowen, is facing federal felony charges in Miami in connection with one of group's many investments in essentially worthless penny stocks. |
