Boston Provident Trader Ezra Levy Arrested for Theft

Date: Wednesday, November 11, 2009
Author: David Glovin, Bloomberg.com

Ezra Levy, a hedge fund trader and chief financial officer of Boston Provident Partners LP, was arrested on federal charges that he stole more than $1.3 million from the Manhattan-based firm.

Prosecutors accused Levy in a criminal complaint of two schemes to defraud Boston Provident, run by Orin Kramer, the chairman of the New Jersey State Investment Council. Levy transferred $726,000 from Boston Provident to his bank accounts and had the fund buy shares of Atlas Energy Inc. at inflated prices from an account he controlled, generating a $600,000 profit, according to the complaint.

Levy is accused of participating in the schemes from January to October with other people who weren’t identified in the 11-count securities-fraud and wire-fraud complaint. He was scheduled to appear in Manhattan federal court later today.

“Boston Provident terminated Mr. Levy immediately after learning about this outrageous conduct, and Mr. Kramer contacted the U.S. Attorney,” the firm said in a statement today. “This is an egregious violation of the law and the trust of our investors.”

Kramer will cover Boston Provident’s losses and fees from the alleged crime, the firm said.

“The restitution will increase previously reported investment returns for the firm’s limited partners,” according to the firm’s statement.

$1 Million Bond

Defense attorney Stephen Ascher declined to comment. Levy was released from jail on a $1 million bond.

Levy made wire transfers to his bank account of about $66,000 each throughout the year, according to the complaint. He had joined Kramer Spellman LP, which changed its name to Boston Provident in 2004, as an analyst in 2001. Prior to that he worked for Prudential Securities and SG Cowen after starting out as an accountant in a textiles firm.

Atlas Energy, of Moon Township, Pennsylvania, develops, produces and transports natural gas and oil in the U.S.’s Appalachian Basin.

The case is U.S. v. Levy, 09-mg-2472, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in U.S. District Court in New York at dglovin@bloomberg.net.