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SEC imposes fine on hedge fund manager

August 28, 2008|From Bloomberg News

The Securities and Exchange Commission on Wednesday fined a California hedge fund manager and newsletter publisher $100,000 over claims he misled people into investing $20 million in two fraudulent real estate firms.

Mark J.P. Boucher of Portola Valley helped raise the money by falsely claiming the investments were secured by real estate when one company never owned property and the other was "wholly underwater in debt," the SEC said.

Without admitting the claims in the civil suit against him, Boucher agreed to be barred from serving as an investment advisor for five years, the agency said.

"Boucher was able to attract a lot of people to these investments based on his reputation as a successful hedge fund manager," SEC lawyer Kristin Snyder said. "Once he did, fairly quickly he realized these investments were not what they promised and he continued to hide significant information from the investors."

His lawyer, John Cotton, said Boucher was "pleased to put the matter behind him."

Snyder and Cotton both declined to say whether Boucher was still managing funds.

The SEC also sued the Southern California owners of each of the two firms, John E. Brake and Gary P. Johnson. Brake was accused of using ill-gotten gains for homes, cars, a chauffeur and private jet travel, and Johnson was accused of spending investor money to finance a failed furniture business, the SEC said.

Johnson will forfeit more than $1.8 million without admitting or denying the SEC's allegations, and Brake hasn't resolved the case against him, the SEC said.

Johnson "found that it would be better to settle than do battle," his lawyer, Gary Grant, said.

Brake is not yet represented by a lawyer, according to the SEC, and couldn't be reached for comment.

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