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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Tony Viola who wrote (96753)	1/19/2000 4:57:00 PM
From: Paul Engel	Respond to of 186894

Intel & Intel Investors - A Hedge Fund Bites the dust - betting AGAINST Technology ! I wonder if David Lice's Prudent Bear Fund and Fleckenshort's Capital Mismanagment are next ? Paul {==============================} SEC files fraud suit against hedge fund By Reuters Special to CNET News.com January 19, 2000, 11:15 a.m. PT URL: news.cnet.com NEW YORK--The Manhattan Investment Fund, a hedge fund operating out of New York that bet against high-flying Internet stocks, devised a "massive fraud" to hide large losses from investors, the Securities & Exchange Commission alleged in a lawsuit. Michael Berger, a 29-year-old Austrian national, and his hedge fund "knowingly, recklessly or negligently made numerous materially false and misleading statements regarding the performance and value of the fund to prospective investors in the hedge fund," the SEC charged in the lawsuit filed yesterday in the U.S. District Court for the Southern District of New York. The fund, registered in the British Virgin Islands, has raised over $350 million from 280 investors since its launch in September 1996 by "grossly overstating the performance and market value of the hedge fund's holdings," the SEC alleged. The fund now has assets of less than $50 million, and investors have lost over $300 million in investments centered around short-selling of Internet-related stocks, the U.S. regulator charged in the lawsuit. The three-year-old fund also faces potential lawsuits from several investors. Bank Austria confirmed through a representative that it had filed legal proceedings against Manhattan Investment Fund. Hedge funds are loosely-regulated investment vehicles for wealthy individuals and institutions. The Manhattan Investment Fund was not registered with the SEC. But the regulator has the power to take action against any financial entity that engages in fraud when investing and selling U.S. securities. The fund's hidden losses came to light recently when an investor, puzzled by its profits from short positions in high-flying Internet stocks, called Bear Stearns, the fund's prime broker. Most Internet stocks zoomed higher last year, with the technology-heavy Nasdaq composite index gaining 85 percent in 1999. Bear Stearns said in a statement yesterday that it was "surprised and concerned when an investor contacted us seeking to verify a reportedly strong performance for the fund, where our reports have, for the last few years, indicated significant losses." Bear Stearns said it then brought the matter to the attention of the SEC and is cooperating with the agency in the investigation. The SEC charged in the lawsuit that Berger made false statements not only to investors, but also to Deloitte & Touche, its auditor. Deloitte withdrew as the fund's auditor 10 days ago, a representative for the accounting firm confirmed. Story Copyright © 2000 Reuters Limited. All rights reserved. Go to Front Door \| E-commerce \| Search \| Short takes \| One Week View