Viper Charged With Slippery Moves

Sometimes we wonder what would cause a person to name a hedge fund after a poisonous snake. Of course, now investors are discovering why. He spoke with a forked tongue. The SEC has charged Edward Ehee, an Oakland, Calif., hedge fund manager, with defrauding 18 investors in his Viper Investments, Viper Founders Fund, and Compass West Fund out of some $5 million.

According to the complaint filed in U.S. District Court for the Northern District of California, Ehee gave thousands of dollars to family members from money he raised from investors, which included the children?s trust fund of a neighbor and the life savings of the neighbor?s mother-in-law. In its complaint, the SEC alleges that Ehee continued to raise money for the Viper Founders Fund as recently as last May, even though the partnership for the fund incorporated in Illinois basically ceased operations about four years ago.

Says the SEC, Ehee covered his tracks by using bogus account statements and phony financial reports showing millions of dollars in non-existent fund assets to lure new investments. Ehee provided one investor earlier this year with supposedly audited financial statements showing the fund had more than $18 million AUM with annual returns of 10%.

He is also charged with fabricating an audit opinion letter from an accounting form that never actually audited the funds. The court has granted the SEC’s request to freeze Ehee’s funds and those of his wife, brother, and father, who received thousands of dollars of investor money from Ehee.

And the duped investors? Rots of ruck!

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