A New Canaan, Conn. hedge fund manager was charged for violating at least seven state securities laws this week including fraud and misleading regulators. Howard Pitkin’s team at the CT Banking commission made a bold move and issued a cease and desist order against Greg Imbruce of Stamford-based ASYM Capital in an attempt to stop him from managing his investors money. Imbruce alleged illegal actions against his own investors was first reported by me last year for finance trade publication Growth Capitalist. The middle-age hedgie, with three young children, is looking at fines of over one million dollars if the State banking regulator is able to find him guilty on all counts.
Imbruce specializes in oil and gas investments and got his start in the sector by managing money for the Madoff family. I previously reported he mislead his high net worth investors in ASYM Capital about the FINRA rule 105 violations he was sanctioned and fined for while working for Madoff Securities. Local New Canaan resident Bill Mahoney and Brad Higgins were part of the aggrieved investor group who used a top civil litigator, Jon Whitcomb, to fret out the layers of fraud Imbruce went through to deceive his investors. Whitcomb sued two years ago and, as previously reported, the CT Banking Commission started investigating earlier this year after internal whistleblowers, documents discovered from civil litigation, and my reporting came to light in the public eye.
Imbruce has since fought tooth and nail to stay managing his fund and keeping his alleged fraud from his social community in New Canaan and the Stamford Yacht Club where he is an active member and sailor. According to people familiar with his actions he even personally called the local AOL Patch reporter who wrote about the CT banking commission press release yesterday and threaten to sue if the story was not taken down. He would have no basis for a libel lawsuit since the reporter just rewrote the Banking Commission lawsuit but that didn’t stop him from threatening. I have witnessed Imbruce taking aggressive tactics to intimidate and silence internal whistleblowers and his own investors who have spoken out about his alleged fraud for over two years now.
This back-street bully who grew up in Westport, CT and attended Staples High School could be facing a ban from ever working as an investment advisor again; meaning he can’t run a hedge fund and earn fees from other peoples money. But how much of his net worth he’d have to give up because of his alledged market abuse is yet to be determined. He moved ownership of his $1.4 million New Canaan home into his wife’s name when he first got whiff of his investors planning to sue him. A move that could be considered fraudulent conveyance. The investors were able to kick him out of some aspects of managing the assets in the fund but at present Imbruce is still set to earn his carried interest if an oil and gas company the fund owns, Starboard Resources, has a liquidity event.
Jon Whitcomb of DISERIO MARTIN O’CONNOR & CASTIGLIONI LLP told this reporter,
“This is certainly a confirmation of what you’ve been reporting on and what my clients have been alleging. He can no longer claim that this is a fictionalized account manufactured by one reporter and fueled by frivolous legal tactics. My client-investors, including some New Canaan residents, deserve this vindication. Aside from the fraud charges, It speaks volumes that one of the State’s charges is for wrongful withholding of documents. My investors have been trying to get information regarding their investments for three years, to no avail, begging the question, what is he hiding?”
Imbruce attorney did not return a call for comment. This is the third attorney he’s hired to fight the CT Banking Commission allegations and the investor claims. Usually hedgies facing fines and bans from regulators settle but not Greg Imbruce he refuses to admit guilt. The CT Banking commission can not issue criminal charges but the DOJ could still bring actions against him for investor fraud because he told his investors he had his own money in the fund or for misleading the CT Banking Commission during their investigation. Since Imbruce was managing less than $100 million it is unlikely the Securities and Exchange Commission would take on a case like this.
Banking Commissioner Howard Pitkin is leading the charge in going after hedge fund fraud in CT, which domiciles a large portion of the world’s hedge funds. Unfortunately we rarely see State’s Attorney David Cohen go after Wall Street fraud although he has the power to charge criminally.
Whitcomb expects more investors to file additional civil litigation against Imbruce. Look for continued covering on this alleged fraudster at Growth Capitalist next year.