RIDGEFIELD, Conn. -- The third of three executives who pleaded guilty to running a $26 million fraud scheme at a Ridgefield hedge fund was sentenced to a year and a day in federal prison Thursday.
Richard Pereira, 43, former chief financial officer of New Stream Capital hedge fund, was also sentenced by Chief U.S. District Judge Janet C. Hall in New Haven to three years of supervised release.
According to court documents and statements made in court, in November 2007, New Stream Capital launched new feeder funds, one based in the United States and a series of funds based in the Cayman Islands. New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund.
But rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, Pereira and New Stream managing partners David Bryson and Bart Gutekunst set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption.
As part of the scheme, the three men had New Stream staff secretly execute documents to make the Bermuda Fund’s special priority. New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund.
Moreover, New Stream continued to market to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.
From April 2008 to December 2010, Bryson and Gutekunst each collected more than $5 million in management fees and profit sharing while participating in this fraud scheme. In late 2008, Pereira received a $700,000 bonus from New Stream.
On May 21, 2014, each of the men pleaded guilty to one count of conspiracy to commit wire fraud.
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