N.J. officials charge Jersey City hedge fund, executives with fraud

Wednesday, August 08, 2012, 11:27 AM
By Ed Beeson/The Star-Ledger

State officials have sued a Jersey City-based hedge fund and its executives over charges that they defrauded dozens of investors and sold about $12 million worth of unregistered securities.

The charges were levied against Osiris Partners and an affiliated entity, Osiris Fund Limited Partnership, and 10 individuals who either worked for the firm or sold unregistered interests in the hedge fund, the state attorney general?s office said today in a statement. Among those charged were the firm?s chairman, Peter Zuck, 62, of Middletown, whom the state said also was a three-time convicted criminal.

About 76 investors who bought into the Osiris fund between mid-2009 and the end of 2011 were victims of the alleged fraud, state officials wrote. According to the complaint, the firm violated multiple provisions of the state?s securities law, including producing phony investor account statements, overstating the value of Osiris fund?s assets to generate higher management fees and conceal losses. The fund firm also employed unregistered agents to sell limited partnership interests in the Osiris fund and failed to disclose Zuck?s criminal background, which include convictions for securities fraud, officials wrote.

?We allege these defendants enriched themselves by pocketing at least $4 million of investors? hard-earned money from the fund while they concealed substantial losses,? Attorney General Jeff Chiesa said in a statement, adding that the state is seeking to freeze the defendant?s assets. The state also named four individuals as relief defendants.

?This case clearly illustrates why we urge consumers to perform their due diligence before investing their money,? said Eric Kanefsky, acting director of the state Division of Consumer Affairs. ?Unregistered people selling unregistered securities are serious red flags, as is any past criminal history in the securities industry.?

State officials did not immediately have defense counsel information for Osiris. A phone number for the firm was disconnected.

http://www.nj.com/business/index.ssf/ ... ls_charge_jersey_cit.html