KS Advisors, et al.

On February 27, 2004, the SEC obtained a temporary restraining order and asset freeze against a number of defendants involved in an alleged hedge fund fraud. The defendants included a hedge fund advisor, KS Advisors, Inc., and its principals, Scott Fine and Kevin Boyle, and two hedge funds, KS Condor Partners, Ltd., II and Damian Partners, LLC.

According to the SEC, beginning in at least 2000, the defendants told more than 100 investors nationwide and overseas about the increasing profits and net asset values in their hedge funds. The SEC claimed, however, this was completely false—the hedge funds were actually losing millions of dollars. The SEC further alleged investors were charged fraudulent fund performance fees based on the fictitious gains in the values of the funds and undisclosed “advisory fees.” On May 25, 2004, the Court entered a permanent injunction against the principals of the hedge fund advisor. On December 27, 2004, the Court entered a permanent injunction against the hedge fund advisor and the hedge funds.

For more information about the SEC’s action, you can read Litigation Release Nos. 18600, 18812, and 19024.

The Court appointed Mitchell Herr, Esq., as Equity Receiver over the corporate defendants. For the latest information, you can visit the website established by Mr. Herr.

http://www.sec.gov/divisions/enforce/claims/ksadvisors.htm