U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22144 / October 31, 2011
United States of America v. Andrey C. Hicks (United States District Court for the District of Massachusetts, Case No. 11-mi-1147-RBC)
Securities and Exchange Commission v. Andrey C. Hicks and Locust Offshore Management, LLC, as Defendants, and Locust Offshore Fund, Ltd., as Relief Defendant (United States District Court for the District of Massachusetts, Civil Action No. 1:11-cv-11888-RGS)
U.S. Attorney Charges Massachusetts-Based Purported Hedge Fund Manager with Fraud
The Securities and Exchange Commission today announced that the U.S. Attorney for the District of Massachusetts has charged Andrey C. Hicks of Boston, Mass., in a criminal complaint unsealed on Friday, October 28, 2011. Hicks was charged with committing wire fraud, attempting to commit wire fraud, and aiding and abetting wire fraud, in violation of 18 U.S.C. Sections 1343, 1349, and 2.
On October 26, 2011, the SEC filed an emergency enforcement action charging Hicks and Locust Offshore Management, LLC, his investment advisory firm, with fraud in connection with misleading prospective investors about their supposed quantitative hedge fund and diverting investor money to the money manager’s personal bank account. The SEC alleges in its complaint that Hicks and his advisory firm made misrepresentations about his education, work experience, and the hedge fund’s auditor, prime broker/custodian, and corporate status when soliciting individuals to invest in the purported hedge fund, called Locust Offshore Fund, Ltd. By making these representations and creating other indicia of legitimacy, the SEC alleged that Hicks may have obtained at least $1.7 million from 10 investors and may have misappropriated at least a portion of these funds for personal expenses. In the Commission’s action, the U.S. District Court in Massachusetts issued a temporary restraining order on October 26 that, among other things, freezes the assets of the money manager, his advisory firm, and the hedge fund. On October 28, 2011, the Court converted the temporary restraining order into a preliminary injunction that will continue the asset freeze and other relief until further order of the Court.
For further information, please see: Litigation Release Number 22141 (October 26, 2011).