SEC Imposes Fines Over Hedge Fund Marketing
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The Securities and Exchange Commission has fined Norman Zadeh $165,000 in a case related to his once-popular contests for ranking the performance of hedge funds.
The agency also imposed a $137,500 fine against Prime Advisors Inc., a money management company owned by Zadeh and his associate Jeffrey Goodstein, who was ordered to pay a $27,500 penalty. All three settled the SEC charges without admitting or denying guilt.
Under federal law, money managers are limited in their ability to solicit investors for hedge funds. The SEC alleged that Zadeh indirectly marketed Prime Advisors hedge funds to a wide audience that responded to print advertisements describing the performance of the investment contests.
“We were accused of not knowing some of the people who we referred to the hedge fund well enough,” Zadeh said. He said he interviewed all prospective clients before sending them a prospectus.
Zadeh, 47, of Beverly Hills, administered two nationwide, from 1983 to at least 1994: Money Manager Verified Ratings and U.S. Investing Championship.
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