Business

Feds charge hedge fund exec with fraud

A hedge fund exec who worked with New Jersey’s top pension fund official Orin Kramer was busted yesterday on charges he stole more than $1 million from Kramer’s New York hedge fund firm, Boston Provident.

Federal authorities arrested 32-year-old Ezra Levy at his home on charges of securities fraud and wire fraud related to his allegedly arranging secret sales of securities at inflated prices from the hedge fund to his own personal account.

Levy was released on $1 million bail with travel restrictions. A preliminary hearing date was set for Dec. 10.

The Securities and Exchange Commission also filed charges, accusing Levy of pulling the trigger on sales to “benefit himself at the expense of Boston Provident and its clients.”

In one case, Levy directed the $157 million hedge-fund firm to buy 112,000 shares of Atlas Energy from his brokerage account for approximately $19.48 per share. On that day, however, the stock traded no higher than $17.21 and closed at $15.75.

Levy had the OK to execute trading decisions on behalf of Kramer, but not at his own discretion, the feds said.

In a statement, a spokesman for Boston Provident said the firm was “outraged to learn of the theft carried out by a former employee,” calling it “an egregious violation of the law and the trust of our investors.”

Kramer, who’s chair of a committee that oversees New Jersey’s $68 billion pension fund, said he plans to reimburse investors for their losses.

A source familiar with the situation said Levy stepped up in late October to offer a partial confession to Kramer after both he and the firm had received subpoenas from the SEC.

At the time, Kramer had no idea what the subpoena was about. But even though he wasn’t yet told the full scope of the alleged misdeeds, he immediately terminated Levy, this person said.