On Thursday, the Securities and Exchange Commission charged Jason Konior of defrauding investors by promising steep returns on investments in his fund. The SEC holds that the New York fund manager has been running an $11-million Ponzi scheme. According to the SEC complaint, the fund manager had used about $2 million of the investments to fund his own lifestyle and expenses, and to cover redemption requests from earlier investors. The lawyers of Jason Konior were not available for comments.

The Absolute Fund LP was advertised by Konior as a $220 million vehicle that would combine new investments with its heavyweight principal funds and place the accumulated sum into brokerage accounts which could be used by investors to trade securities. The conditions were that if an account lost money, then the investor would initially be on the hook until his or her contribution was finished and exhausted. However, if the account earned profits then the profits would be split between the investor and Absolute Fund LLP.

On this premise, and promising that Absolute would put up at least nine times of the investment it received, Konior collected about $11 million from four different investors beginning from last November. However, when the investors asked to withdraw the money, the money was not there.

  

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The complaint made by the SEC mentions that “Absolute’s current assets represent only a fraction of the amount needed to repay its current investors.”

The case is Securities and Exchange Commission v. Konior, U.S. District Court for the Southern District of New York, No. 12-04145.