A federal judge in Georgia has ordered hedge fund manager Kirk Wright to pay nearly $20 million in fines and penalties for defrauding investors through his firm, International Management Associates LLC, the U.S. Securities and Exchange Commission said on Monday.
U.S. District Court Judge Charles Pannell Jr. entered a default judgment against Wright ordering disgorgement of $17 million, interest of $2.7 million and a civil penalty of $120,000, the SEC said in a statement.
From 1997 through early 2006, Wright raised as much as $185 million from 500 investors through a "fraudulent scheme" involving seven hedge funds that he managed through IMA, the SEC said in a lawsuit filed a year ago.
The firm sent out quarterly statements misrepresenting the amount of money in those funds and their performance, the SEC said.
"By 2005, the assets of the funds had been largely dissipated and this fact was not disclosed to investors," the SEC said.