Corporate & Securities Law

On January 14th, the Securities and Exchange Commission filed settled charges against Justin Paperny, a former broker at UBS Financial Services for his role in a hedge fund fraud.  The SEC alleged that Paperny participated in a fraudulent offering of limited partnership interests in a hedge fund known as the GLT Venture Fund, L.P.  Paperny was GLT's broker and he falsely told GLT investors that GLT had access to so-called hot IPOs and had achieved high average annual returns. 

The complaint alleged that Paperny arranged for new GLT investors to place their funds in GLT through UBS Financial and executed thousands of GLT securities trades using funds of GLT and its investors who, Paperny knew, were being defrauded by the fund manager.  In exchange, Paperny received approximately $220,000 in commissions and in additional payments from the hedge fund manager. 

Without admitting or denying the SEC's charges, Paperny consented to the entry of a judgment, which among other things, requires him to pay disgorgement with prejudgment interest and a civil penalty in amounts to be determined.