Vuk Vukovic, co-founder of New York-based hedge fund Oraclum Capital, has been charged by US prosecutors with securities and wire fraud over allegations that he misrepresented the performance of the firm’s investment fund to clients, according to a report by Bloomberg.
Federal prosecutors allege that Vukovic, 38, supplied investors with statements showing returns that were higher than those actually generated by the Orca Bason Fund. In one instance, he allegedly provided an investor with a fabricated account statement that overstated both the fund’s net asset value and investment performance.
Vukovic faces one count each of securities fraud and wire fraud. Each charge carries a potential maximum sentence of 20 years in prison if he is convicted.
He made an initial appearance in federal court on Thursday and was released on a $200,000 bond. Vukovic reportedly did not immediately respond to messages seeking comment, while a lawyer representing him could not immediately be identified. Oraclum also reportedly did not respond to requests for comment.
According to court documents, the alleged misrepresentations began in 2024. The case came to light as the US Securities and Exchange Commission investigated Oraclum and subpoenaed records relating to the fund’s monthly performance.
Prosecutors allege that documents supplied to the SEC by Oraclum, including investor statements detailing account balances and monthly and annual returns, differed materially from performance statements supplied to the regulator by the fund’s independent third-party administrator.
One example cited by prosecutors concerns a statement covering June 2024. The document sent to an investor allegedly showed a 4.66% return for the month and a 12.29% gain for the year to date. The corresponding statement supplied to the SEC by the administrator showed that the fund had instead lost 1.38% over the year-to-date period.
Prosecutors say the discrepancies extended beyond that individual account. Statements supplied to roughly 20 investors allegedly showed year-to-date performance that was higher than the figures appearing on statements generated by the fund’s administrator.
An FBI agent said in court filings that authorities searched Oraclum’s Manhattan offices on Wednesday. According to the filing, Vukovic told investigators that brokerage statements provided to at least one investor were false and contained misstated fund returns.
No other Oraclum employees or executives have been accused of wrongdoing in the case.
