Hedge Fund Manager Faces SEC, Criminal Charges

WASHINGTON (Dow Jones/AP) - The manager of hedge funds Tiburon Asset Management and Tiburon Partners was charged with cheating investors out of millions of dollars by inflating returns and investing in risky companies with whom he had undisclosed side deals. snip

Montagna was accused of losing about $10 million in investor funds. He overstated the value of hedge fund assets and performance, which in turn generated management fees that were larger than he was supposed to receive, federal authorities said.

Montagna also siphoned off investor funds to pay for travel expenses, a mink jacket, and credit card bills, the government said. According to the SEC, most of the investor money is gone, lost because of investments in small, high-risk private companies that agreed to provide side benefits, such as a stock or stock options or in one case a lucrative consulting arrangement.