[Image: Uneven Balance Scale Clipart]

by Howard Haykin

A federal court issued a ruling against Thomas C., Jr., finding that the Alpharetta, GA, adviser directed preferential redemptions and other disbursements out of a hedge fund and its feeder funds operated by firms he controlled. Conrad was fined $327,500 along with other sanctions.

According to the Securities and Exchange Commission (the “SEC”), the hedge and feeder funds under his control made disbursements to Thomas C., his extended family, and certain favored investors, while representing to other investors that redemptions were suspended.

TAKE AWAY.    It’s often difficult, if not impossible, for investors to know when a dishonest adviser is providing preferential, or unequal, treatment to others at their expense. For protection, it pays to know one’s rights as an investor, and to seek out regulatory authorities for advice whenever they're concerned about being treated improperly. Alternatively, investors should seek out a second opinion from a trusted independent friend or adviser, who might know and advise what options are available to the investor.

[For further details, click on SEC Litigation Release and SEC Complaint.]