Administrative Proceedings to Be Scheduled Against

The SEC alleges that the defendants falsely told investors that the hedge fund had generated cumulative returns of up to 148%, when in reality the fund had lost at least US$850,000 during its operation. Messrs. House and Moore also allegedly borrowed at least US$400,000 from the hedge fund to purchase real estate for themselves. Both men had prior personal bankruptcies, which was information not included in the offering materials, the SEC pointed out in its administrative proceeding filing. The commission also alleges that the pair made false and misleading statements in the offering materials about Mr. House's background as a broker.

A hearing will be scheduled before an administrative law judge to determine whether the allegations are true, to give the defendants an opportunity to dispute the allegations and to see what sanctions are appropriate and in the public interest.