Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Absolute Capital’s Homm Is Charged With Securities Fraud

March 20 (Bloomberg) -- The fugitive German hedge fund manager who more than five years ago fled the Spanish island of Mallorca with $500,000 hidden in his underwear and luggage was charged with securities and wire fraud.

A federal grand jury in Los Angeles, California, charged Florian Homm, 53, in a 10-count indictment, U.S. Attorney Andre Birotte Jr. said today in an e-mailed statement.

Homm was arrested by Italian police on March 8 in Florence, Italy, at the Uffizi Gallery, the world-famous museum that houses Sandro Botticelli’s “Birth of Venus” and Leonardo da Vinci’s “Annunciation.”

Homm is accused of defrauding investors in hedge funds he controlled, causing $200 million in losses. He is charged with one count of conspiracy, eight counts of securities fraud, and one count of wire fraud in an indictment filed yesterday, which replaces an earlier criminal complaint, according to the statement.

The founder and former chief investment officer of Cayman Islands-based Absolute Capital Management Holdings Ltd. is accused of “cross trading” billions of shares of penny stocks between the company’s funds to boost the value of the otherwise illiquid securities.

Inflated Prices

The trades, through a Los Angeles-based broker-dealer that Homm co-owned, generated fees for Homm and Absolute Capital and also inflated the price of Absolute Capital’s shares, prosecutors said. Homm sold his shares and resigned from Absolute Capital on Sept. 18, 2007, according to the statement.

Homm is still in Florence awaiting extradition. There is no date set for those proceedings.

Homm doesn’t have a lawyer yet in the criminal case, according to Stephen Cazares, an assistant U.S. attorney in the case.

The case is U.S. v. Homm, 13-MJ-00740, U.S. District Court, Central District of California (Los Angeles). The SEC case is Securities and Exchange Commission v. Ficeto, 11-cv-01637, U.S. District Court, Central District of California (Los Angeles).

To contact the reporters on this story:

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net Edvard Pettersson in Los Angeles federal court at epettersson@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.