Regulators claim he misled hedge fund investors, misused money to support Chinese company
Former New York Daily News financial columnist and investment manager Peter Siris has agreed to pay $1.1 million to settle an SEC complaint that he misled investors in his two hedge funds and used $1.5 million of fund investments to support a Chinese company that was paying him.
Mr. Siris, 68, acted as a paid consultant to several Chinese companies, including the now-defunct China Yingxia International Inc., helping them access U.S. capital markets through reverse mergers, according to a Securities and Exchange Commission complaint filed in the U.S. District Court for the Southern District of New York.
The SEC alleged that he didn't disclose to his fund investors the depth of his involvement in China Yingxia, including acting as “de facto management.”
China Yingxia, which purported to be a nutritional-foods company, effectively ceased operations in March 2009, and Chinese reports said that the company's chief executive has been sentenced to death for illegal fundraising activities, such as a Ponzi scheme, the SEC said.
In addition to misleading investors, Mr. Siris, who manages two funds and had about $160 million in assets under management at the end of 2010, and his two firms allegedly also broke insider trading rules, sold unregistered securities and engaged in other misconduct from 2007 through 2010.
Mr. Siris, his investment management firm, Guerrilla Capital Management LLC, and his consulting firm, Hua-Mei 21st Century LLC, agreed to pay the settlement without admitting or denying the SEC allegations.
His lawyer William Munno at Seward & Kissel LLP didn't return a call seeking comment.
“Siris operated by his own set of rules in his dealings with China Yingxia and other Chinese issuers,” said Andrew Calamari, acting director of the New York SEC office. “He was the go-to person when Chinese reverse-merger companies wanted to raise capital or needed advice about operations, but he used his prominence and reputation in this area to illegally game the system to his advantage.”
The Daily News has no comment on the matter, Kanessa Tixe of Source Communications, wrote in an e-mail.
