Westgate Capital manager caught
"Nice one, James."
The fallout from the Bernie Madoff disaster continues. So, when is it that you’re going to step up your monitoring of financial fraud, SEC? Any time now…
Alistair Barr of MarketWatch brings our attention to James Nicholson, 42, the manager of the investment firm Westgate Capital Management LLC. Mr. Nicholson has been ceremoniously arrested at his Saddle River, New Jersey home on charges of securities fraud and bank fraud, according to the Department of Justice.
I learned it from you, Bernie
Nicholson told investors that Westgate Capital had assets within the company that ranged anywhere from $600 to $900 million. However, in true Bernie Madoff style, the real value of Westgate’s assets was substantially lower. As a result, investors dumped as much as $100 million into a variety of funds managed by Westgate since 2004.
It’s in the brochures; must be right!
Futhermore, Nicholson’s associated Westgate Strategic Growth Fund was audited by an independent accounting firm. However, the DOJ determined that this accounting firm was actually a virtual firm registered at a virtual address. In case of telephone inquiries, an answering service was set up that would direct calls to a phone number that Nicholson provided.
Brochures for Strategic Growth claimed “positive returns for each month from January 2004 through August 2008.” Similar brochures that made similar claims were produced for other Westgate funds. Reports were uniformly positive, despite what was happening in reality, said the DOJ.
Surprise, surprise – a Madoff connection
When Bernard Madoff’s $50 billion Ponzi scheme occurred, a number of Westgate investors wanted out. Around 24 of them got checks which totaled $5 million, but guess what? Those checks bounced! Bernie, James, Westgate Capital… you’ve made a killing!
Related links:
Found Fund Managers Charged with Securities Fraud
RealityTrader Trading Log: Feb 25 2009
George S. May Business BlogWG Trading, Westgate Capital sued by …
No wonder the stock market is tanking…..nobody trusts anybody anymore.
Grrrr……
Westgate Strategic Felony is more like it. I know they teach ethics in most business programs. This guy should have his MBA rescinded, right before they lock him up and throw away the key.
Of course it can be easily avoided, but the question is if someone wants to avoid it. The financial fraud is great opportunity for many financier to become richer. This is really terrible for all other people.