RIDGEFIELD, Conn. – Three men from a Ridgefield-based hedge fund surrendered to the FBI in New Haven on Tuesday morning after being charged with conspiracy, securities fraud and wire fraud.
According to a statement from the Department of Justice, a federal grand jury returned a 19-count indictment last Friday against David Bryson, 44, and Richard Pereira, 40, both of Ridgefield; and Bart Gutekunst, 61, of Weston, all executives of New Stream Capital LLC.
“As alleged, fearing the loss of their fund’s largest investor, these defendants orchestrated a scheme to deceive investors in order to obtain and maintain investments,” U.S. Attorney David Fein said in a statement.
Bryson and Gutekunst were managing partners and principals at New Stream Capital; Pereira was the chief financial officer.
In November 2007, New Stream launched new feeder funds, one based in the United States and a series of funds based in the Cayman Islands, the statement said. New Stream also announced that its Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund, the statement said.
But rather than transfer, the largest investor in New Stream asked to liquidate their investment, the statement said. The three men are accused of working in secret to keep the Bermuda Fund open for the one investor and had the staff reorganize the fund structure to keep the investor, without informing the additional investors who had transferred to the Cayman fund, the statement said.
Each defendant is charged with one count of conspiracy, 10 counts of securities fraud and eight counts of wire fraud. The conspiracy charge carries a maximum term of five years in prison, and the securities fraud and wire fraud charges carry a maximum term of 20 years in prison on each count.
The case was investigated by the FBI and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission. Assistant U.S. Attorneys Liam Brennan and Michael S. McGarry are prosecuting the case.
All three appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford on Tuesday and pleaded not guilty. Bryson and Gutekunst were released on $5 million bond each; Pereira was released on $300,000 bond.