Claim of 25% returns from stock index investments was a fraud: SEC
Commission claims Geringer actually lost millions in trades, duped clients
A California investment adviser who raised $60 million from 2005 to this year allegedly lied to investors about how their money was being used.
According to a complaint filed in federal court in San Jose by the Securities and Exchange Commission, John A. Geringer, manager of GLR Growth Fund LP, attracted investors by telling them the fund earned 17% to 25% a year by investing three-quarters of its assets in well-known stock indexes such as the Standard & Poor’s 500.
In reality, his trades lost millions of dollars. The SEC claims that the only money Mr. Geringer, 47, paid to investors was from taking newer investors’ funds in a Ponzi-like scheme. By mid-2009, the fund no longer bought any publicly traded securities but did invest in a pair of illiquid private technology companies, the complaint alleged.
“Geringer painted the picture of a successful fund weathering America’s financial crisis through a diversified, conservative investment strategy,” said Marc Fagel, director of the SEC’s San Francisco regional office. “The reality, however, was the complete opposite.”
The SEC said there is no known attorney for Mr. Geringer, and a call to his residence wasn’t immediately returned.
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