SEC: Mgr Used Client Cash to Send Wife on Shopping Spree

Date: Friday, September 28, 2007
Author: HFN Daily Report

Manager Alexander James Trabulse lied about his investment performance and gave client money to his wife so she could shop abroad, the SEC alleged in a lawsuit.

Trabulse, who ran Fahey Fund out of San Francisco, overstated his investment return by as much as 200%, the SEC said.

He also used his hedge fund as his personal bank account, according to the SEC. In addition to financing an international shopping spree for his wife, he used client money to buy a car and a home theater system.

Trabulse also gave one relative free reign over the bank account for the hedge fund, the SEC said.

Fahey Fund opened in 1997 and raised about $10 million.

The SEC is seeking payback for the money Trabulse allegedly looted.