NEWARK – Attorney General Jeffrey S. Chiesa and the New Jersey Bureau of Securities have sued a Jersey City-based investment firm and its executives, charging that they defrauded investors and raised approximately $12 million through the sale of unregistered securities.
Osiris Fund Limited Partnership, Osiris Partners, LLC, and 10 individuals who either worked for the firms or sold the Osiris Fund’s unregistered securities, are named as defendants in the state’s nine-count complaint filed in State Superior Court in Jersey City. An additional eight defendants, many of them relatives of the defendants, are named as relief defendants who allegedly benefited from the fraud through their receipt of cash and other items.
In its complaint, the state alleges that the defendants committed multiple violations of the New Jersey Uniform Securities Law. The alleged violations committed by the defendants include creating false investor account statements, overstating Osiris Fund’s net asset value to produce higher management fees and conceal losses, and employing unregistered agents to sell limited partnership interests in the Osiris Fund. Approximately 76 investors who bought into the Osiris Fund between mid-2009 and the end of 2011 were allegedly defrauded.
“The defendants allegedly lied to investors and then created false records to maintain their deception. We allege these defendants enriched themselves by pocketing at least $4 million of investors’ hard-earned money from the fund while they concealed substantial losses,” Chiesa said. “We’re asking the court to freeze the defendants’ assets, with the goal of returning money to the defrauded investors.”
The state contends that investors sustained substantial losses through the alleged actions taken by the defendants.
According to the investigation, Peter Zuck, 62, of Middletown, chairman of Osiris Partners, is a three-time convicted criminal who was previously convicted of securities fraud and misconduct by a corporate officer, theft by failing to make a disposition of funds, and illegally retaining funds.
“This case clearly illustrates why we urge consumers to perform their due diligence before investing their money,” said Eric T. Kanefsky, Acting Director of the State Division of Consumer Affairs. “Unregistered people selling unregistered securities are serious red flags, as is any past criminal history in the securities industry.”
“Investors who believe they are victims in a fraudulent scheme should file a complaint with us. The Bureau has investigators who will check into filed complaints and take swift action when there’s fraud,” said Abbe R. Tiger, Chief of the N.J. Bureau of Securities.