Ex-Boston Provident fund chief trader admits fraud
NEW YORK |
NEW YORK (Reuters) - The former chief trader and chief investment manager of Boston Provident LP pleaded guilty on Thursday to charges of stealing $3 million from the Manhattan hedge fund firm.
The executive, Ezra Levy, 32, admitted in a plea proceeding before U.S. District Court Judge Kevin Castel that last year he conducted trades that were profitable for him, but a loss for the hedge fund.
"I used those funds to pay for my personal expenses," Levy told the judge in pleading to one count of securities fraud and one count of wire fraud.
One of those trades was a $600,000 profit for himself by having Boston Provident buy shares of Atlas Energy Inc and Atlas Energy Resources at inflated prices from an account he controlled.
Levy faces between five years and 6-1/2 years in prison under federal guidelines following his guilty plea. He remains free on $1 million bond until his sentencing, scheduled for June 18.
Boston Provident is run by Orin Kramer, chairman of the New Jersey State Investment Council, which oversees that state's pension fund.
The fund said in a statement when Levy was arrested and charged last November that it had dismissed him. At the time, U.S. prosecutors accused Levy of stealing $1.3 million, about half the amount he admitted in court to defrauding.
Boston Provident said Kramer would personally replace the stolen funds and cover the firm's legal fees.
The U.S. Securities and Exchange Commission has also charged Levy with civil fraud.
The case is USA v Levy , U.S. District Court for the Southern District of New York, No. 10-mj-02473.
(Reporting by Grant McCool. Editing by Robert MacMillan)
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