Investors who say they lost money due to alleged fraudulent conduct at a $19-million Oceanside-based hedge fund have filed a civil lawsuit seeking repayment and penalties.
The suit, filed this month in Manhattan Supreme Court, cites a July 17 Securities and Exchange Commission finding that North American Globex Fund Lp repeatedly deceived its investors.
The finding, for example, said that at one point in 2007 Globex Fund had claimed to hold $14.5 million in assets, while in fact it held $6,000.
"The fund organizers engaged accountants and other professions that were complicit and, the investors allege, actively aided in the fraud," the plaintiffs' lawyer, Marc Fitapelli, said in an email.
Peister and the other defendants could not be reached for comment.
Peister founded Globex Fund in 2000. It attracted 72 investors and grew to about $19 million, but when the stock market's tech bubble burst it soon began losing money, the lawsuit says.
The suit claims that Peister made false statements and hid those losses by creating a separate company, Northstar International Group, where he claimed to have moved the investors' money.
The civil suit comes after federal agency agreements in which the defendants did not admit or deny the allegations.
In a settlement with the Commodity Futures Trading Commission last year, Peister and Northstar agreed to pay $11.3 million in restitution and penalties. The commission said Peister used funds for personal and business purposes.
And in a settlement with the SEC last year, the agency said Sofo made "false statements," failed to exercise due care and failed to show adequate professional skepticism about Peister's financial claims.
Also named in the new suit are John Geantasio of New Jersey, the chief financial officer of Northstar; and two outside firms, Strategic Asset Management Llc of Manhattan and Equinoxe Alternative Investment Services of Atlanta, which Peister retained to provide financial reports to the plaintiffs. These defendants did not respond to requests for comment.
No current telephone listings were available for Peister, and court documents did not list a current attorney representing him; a previous attorney for Peister, from an SEC proceeding, did not respond to a request for comment.
No telephone listings were available for Globex and several other companies listed as defendants. Sofo did not respond to a telephone message left at his home; and his firm, Kurcias, Jaffe & Co., declined to comment on its own or on Sofo's behalf.