Hedge fund manager convicted of fraud

Michael Lauer, the head of Lancer Management Group LLC and Lancer Management Group II LLC of Greenwich, Conn., has been found guilty of overstating the hedge funds’ valuations, manipulating the prices of seven securities and falsely representing the funds’ holdings in newsletters. On the heels of a decision yesterday by the U.S. District Court in the Southern District of Florida in Miami, the Securities and Exchange Commission said it is seeking a financial penalty and disgorgement of more than $50 million. The SEC said Mr. Lauer raised more than $1.1 billion from investors and that his fraudulent actions caused investor losses of approximately $500 million. The SEC halted the fraud in 2003 and frozen Mr. Lauer’s assets, preventing him from diverting or hiding millions of dollars, according to a statement by the regulator. His fraud was “egregious, pervasive, premeditated and resulted in the loss of hundreds of millions of dollars in investors' funds,” Judge Kenneth Marra said in a statement.