Boise-based money manager Gregory Bied and his investor advisory firm, Gold Mountain Management LLC, agreed to settle with regulator charges that they duped investors.
Bied “vastly overstated” the performance of Gold Mountain’s hedge fund, Del Rey Management LP, over two years, according to the U.S. Securities and Exchange Commission. He agreed to pay a $200,000 penalty that will be distributed to fund investors.
This is the second SEC enforcement action taken against Bied. In 2010, he was censured for using Del Rey to engage in illegal trading in advance of the fund’s second offering, the SEC said Tuesday.
“Bied is a repeat violator of the federal securities laws who has refused to play by the rules and be honest with his investors,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office, in a news release. “Rather than disclosing their fund’s actual performance and allowing investors to make an informed decision, Bied and Gold Mountain duped investors into leaving their money in a fund that was plummeting in value.”
Del Rey lost 75 percent on its investments from the start of 2012, when it had 18 investors, to early 2014, falling in value from $9.5 million to $2.4 million, the commission said. But Bied told investors in seven quarterly reports that it was profitable.
In April 2014, he closed the fund and acknowledged to investors that he had "not accurately reported" the losses. He did not take a management fee during those years.
Bied and Gold Mountain settled without admitting or denying the SEC’s filings. They agreed to a cease-and-desist order and to be barred from the securities industry, according the the SEC.