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Securities Fraud - Former Boston Provident Exec Charged - The Hayes Law Firm
By Chad Bray
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(November 11, 2009 - Wednesday) - He is expected to appear before a U.S. magistrate judge in Manhattan later Tuesday. A lawyer for Levy declined comment Tuesday. Levy faces up to 20 years in prison on the securities fraud charge. In a statement, Boston Provident said Levy was terminated as soon as the fund learned of his alleged conduct and Orin Kramer, Boston Provident's general partner, contacted prosecutors from the U.S. Attorney's office in Manhattan. The firm said it will continue to work with the U.S. Attorney and the U.S. Securities & Exchange Commission "in an effort to have Mr. Levy prosecuted to the full extent of the law." The company intends to seize Levy's assets in the partnership and is working with government agencies to seek a freeze of his other personal assets, the fund said.
"Boston Provident was outraged to learn of the theft carried out by a former employee, Ezra Levy, from Boston Provident's limited partners and its general partner," the fund said. "This is an egregious violation of the law and the trust of our investors." Kramer intends to absorb the professional fees arising from Levy's alleged conduct and will provide restitution for the money allegedly stolen by Levy, the fund said. Kramer also is chairman of the New Jersey State Investment Council, which oversees the state's $68.2 billion public pension fund.
In court documents, prosecutors from the U.S. Attorney's office in Manhattan alleged Levy, between January and October, diverted about $726,000 owed to the hedge fund into an account he controls and utilized the money through ATM withdrawals, payments to credit-card companies and transfers to a personal bank account. The money was from an investment in a collateralized note issued by an unidentified Arizona company and generated about $66,000 a month in interest payments for the hedge fund, prosecutors said.
Levy also allegedly caused the hedge fund in June 2009 to purchase shares in Atlas Energy Resources LLC and Atlas Energy Inc. (ATLS) at an inflated price from an account he personally controlled, resulting in a gain to Levy of more than $600,000, prosecutors said. As the fund's chief trader, Levy was responsible for executing traders at the direction of the firm's general partner and portfolio manager, prosecutors said. He wasn't authorized to make trades at his own discretion, prosecutors said.
No one at the fund, other than Levy, authorized or were aware of the stock trades, prosecutors said.
-By Chad Bray
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