The United States Court of Appeals for the Eleventh Circuit has affirmed the District Court’s grant of summary judgment against Michael Lauer, who controlled several hedge funds.
The Eleventh Circuit held that the District Court “had before it overwhelming evidence of Lauer’s knowing false statements.” The Eleventh Circuit also found that the District Court did not abuse its discretion in ordering Lauer to disgorge more than USD62 million. In addition, the Eleventh Circuit affirmed the District Court’s decisions denying Lauer’s repeated efforts to modify the asset freeze and change venue.
On 23 September, 2008, the Honourable Kenneth A Marra, United States District Judge for the Southern District of Florida, granted in part the Commission's motion for summary judgment against Michael Lauer, the architect of a more than USD500 million hedge fund fraud. The Court also permanently enjoined Lauer from further violating Sections 17(a) of the Securities Act of 1933; Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (Exchange Act), both individually and as a control person pursuant to Section 20(a) of the Exchange Act; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In addition, on 7 May, 2009, the judge ordered Lauer to pay disgorgement of USD43,688,249, representing illegally obtained monies and prejudgment interest of USD18,908,558.74. In addition, on 17 August, 2009, the Court imposed a $500,000 civil penalty against Lauer.