Arrest in most lucrative insider trading scheme - New York News

Feds: arrest in most lucrative insider trading scheme

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NEW YORK (AP) - A New York investment manager has been charged with defrauding investors out of more than $2.7 million.

Manhattan federal prosecutors say Stephen Colangelo Jr., misled investors by making false statements, including issuing fraudulent performance statements and other business documents.

Colangelo was arrested Monday at his home in Congers, N.Y.

Prosecutors say he was involved in two separate schemes between 2009 and 2011.

One allegedly involved a hedge fund Colangelo controlled called the Brickell Fund, LLC. The second allegedly involved three companies he created and controlled. They were Hedge Community, Start A Hedge Fund and Under the Radar SEO.

Colangelo was charged with two counts of securities fraud and two counts of wire fraud. Each carries a maximum term of 20 years in prison.

Information about his lawyer wasn't immediately available.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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