A Long Island, N.Y., man who was previously barred from the financial industry has been charged with defrauding investors by falsely claiming to manage a successful hedge fund, the Securities and Exchange Commission announced Wednesday.
According to the SEC's complaint, since at least 2015, Rand Heckler of Glen Cove, a former broker who was barred from the industry by the Financial Industry Regulatory Authority in 2019, solicited more than $700,000 in investments from an elderly investor and the investor's son by claiming to manage a successful hedge fund through his company, Rand Heckler Inc.
The SEC said that, in reality, neither Heckler nor the company ever managed a hedge fund and he never invested the funds he received. Instead, Heckler allegedly misappropriated most of the funds to pay for his personal expenses, including mortgage payments, car payments and a country club membership.
Heckler allegedly sought to conceal his scheme by, among other things, sending phony account statements and trade confirmations to the investor and his son, the SEC said. According to the complaint, when the investor's son tried to redeem part of his father's investments, Heckler solicited a new $100,000 investment from a different investor and persuaded the new investor to transfer the money to a bank account that she believed belonged to an investment firm, but in fact belonged to the first investor.
Motivated in part by the false statements, the investor and his son continued to invest in the sham hedge fund, transferring at least $755,000 to the firm between 2015 and 2020, the complaint said.