Long Island hedge-fund manager Howard Brett Berger has agreed to fork over more than $6.8 million to settle regulatory charges he stuck investors with losing trades — while transferring the proceeds from winning trades into his wife’s account.
Berger performed the financial sleight-of-hand while running the Professional Offshore Opportunity Fund, or POOF, and a second fund, according to the charges filed by the Securities and Exchange Commission.
The 41-year-old money man used an elaborate “cherry-picking” scheme while day trading to cheat investors, the SEC said.
Berger “utilized a direct-access trading platform to delay final allocation of the trades until the end of the day, frequently after the market close, so he could determine whether the trades were profitable,’’ the court papers say.
The trading platform Meeting Street allowed Berger to make market exchanges and place buy orders into a second fund’s “allocation’’ or “suspension’’ account.
“Berger closed out most of the profitable trades before the market closed, that is, he sold those securities that increased in value during the day,’’ the civil action charged.
The SEC concluded he put “most of the unprofitable trades into the POOF account and left many of the profitable trades in the second account, which belonged to his 40-year-old wife, Michelle.
The couple, who live on an estate in exclusive Syosset, have agreed in a consent judgment to pay back the money, along with more than $72,000 in interest and penalties, according to court papers filed in federal court in Central Islip.
In the consent judgment, Berger neither admitted nor denied guilt. He could not be reached for comment.