Massachusetts Hedge Fund Manager Faces Criminal and Civil Fraud Charges Over Alleged Multi-Million Dollar Ponzi Scam

Over the weekend, Yasuna Murakami, a Cambridge-Massachusetts based hedge fund manager, was arrested and charged with wire fraud. Murakami, who managed MC2 Capital Management LLC, is accused of misappropriating investors’ funds in a Ponzi-like scam. The arrest and criminal charges come a few months after the state’s regulator, Secretary of the Commonwealth William Galvin, filed his own administrative case against Murakami for the fraud.

Prosecutors are accusing the hedge fund manager of seeking to bilk investors. The MC2 Capital Canadian Opportunities Fund was supposed to grant American investors exposure to a Donville Kent Asset Management-supervised fund. Instead, Murakami allegedly misused investors’ money to pay for his bills, including purchases at expensive department stores, as well as to make his own investments in the fund.

He is accused of using investors’ money to pay other investors in two other MC2 hedge funds and allegedly misappropriating money from those funds. Under the charging statute, If convicted, Murakami could face up to 20 years in prison, supervised release, a fine, and be ordered to pay up to two times the gross loss or gain.

Meantime, the US Securities and Exchange Commission has filed its own lawsuit against Murakami and his MC2 partner Avi Chiat. The regulator contends that after raising $15M, they defrauded investors.

The Commission is accusing Murakami of stealing more than $8M of investors money and using $1.3M to pay earlier investors in Ponzi Scam-like fashion. The regulator claims that Chiat misled investors. He also is accused of fabricating account statements that exaggerated investment performance. Meantime, investors lost millions of dollars from poor trading and Murakami’s alleged misuse of their money.

Hedge Funds
Hedge funds invest in different kind of investments, including risky investments. Investing in hedge funds can be more risky than many investors think and they are not the appropriate investment vehicle for every kind of investor. It is important that your financial adviser only recommend that you invest in hedge funds if they are a good fit for your investment goals, portfolio, and the degree of financial risk that you can handle.

Because hedge funds don’t have to register with the US Securities and Exchange Commission, they do not have to follow the reporting rules as other types of funds do. That said, hedge fund managers still have an obligation to their customers and they can be brought to task for hedge fund fraud.

Filing a hedge fund fraud claim is not the kind of securities case that you want to do without experienced legal representation. A hedge fund fraud lawyer can advocate on your behalf, protect your legal rights, and increase your chances of financial recovery. Contact Shepherd Smith Edwards and Kantas, LTD LLP today to ask for your free, no obligation, case consultation. We have helped thousands of investors get their money back.

Hedge Fund Manager Charged With Making Ponzi Payments, Defrauding Investors, SEC, May 22, 2017