SEC freezes assets of Connecticut hedge fund manager

The Securities and Exchange Commission has obtained a court order freezing the assets of a Connecticut hedge fund manager who allegedly bilked investors of $30 million by inflating the size of two of his funds. In its complaint, which was filed in U.S. District Court in Austin, Texas, the SEC alleged that Francesco Rusciano of Stamford, Conn., forged documents, promised false returns and misrepresented assets in the funds he managed. The SEC noted in its statement that he managed two hedge funds, the Ponta Negra Fund I LLC and Ponta Negra Offshore Fund I Ltd., and is principal of Ponta Negra Group LLC, which is based in his home. The SEC alleged that Mr. Rusciano forged brokerage account statement to make it appear that the funds had more assets than they actually had. In addition, the SEC alleged that he misrepresented the funds’ monthly and annual performance data, leading investors to turn over $31 million in assets. U.S. District Judge Sam Sparks issued the temporary restraining order, which froze the assets. The complaint was filed in Texas because the broker-dealer for at least 15 of the hedge fund investors was located in Austin, according to the SEC. “We obtained the information [an allegedly forged brokerage account statement] through an examination by our office of the broker-dealer's office,” said SEC spokesman Kevin Edmundson. Michael Sommer, a partner with Wilson Sonsini Goodrich & Rosati of New York, who has communicated with the SEC on behalf of Mr. Rusciano, wasn’t immediately available for comment. A phone number for Mr. Rusciano couldn’t be located by press time.