6.24.2009 The SEC charged California-based hedge fund manager Moises Pacheco and two entities he allegedly controls—Advanced Money Management, Inc., and Business Development & Consulting Co.—for operating a Ponzi-like scheme through five hedge funds that raised $14.7 million from more than 200 investors over a 3½-year period. According to the SEC, Pacheco told investors that he had developed a lucrative investment strategy involving the purchase and sale of covered call options, and that the hedge funds exclusively relied upon this strategy to generate trading profits ranging from 30% to 48% per year. According to the SEC, Pacheco did not generate the returns he claimed to have made and instead used investor principal to pay purported returns until the scheme collapsed.

Click http://www.sec.gov/litigation/litreleases/2009/lr21101.htm to access the SEC litigation release.