Hedge fund manager Michael Regan has pleaded guilty to running a Ponzi scheme. Manager of the Massachusetts-based River Stream Fund, he admitted to defrauding around 70 investors. The fund held just shy of $20 million in assets ... despite the relatively meager $101,600 sitting in its accounts. The fund purported to return 20 percent a year since 2001, paying out $9 million in "profits" and returned capital.
Meanwhile, the fund's trading success could be described as "minimal" on a good day. Regan didn't let this minor problem get in the way of his fees, though. He raked in more than $2.5 million from his efforts at River Stream.
Now that the plea has been entered, Regan faces up to 20 years in prison and $5 million in penalties. For now, he's out on bail and awaiting sentencing. The fraudster also settled civil charges filed by the Securities and Exchange Commission. Under this deal, he has agreed to shell out more than $8.7 million.
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