The US financial watchdog alleges that Bergstein fraudulently obtained more than $5 million from investors.

The Securities and Exchange Commission has charged a former self-proclaimed private equity executive with defrauding investors in hedge funds and using stolen money to purchase firearms and support his extravagant lifestyle. 

According to the US financial watchdog, David Bergstein stole millions of dollars from investors in 2011 and 2012 and used the money for purchases with a firearms dealer, an antique watch and jewellery retailer, and a bonsai tree nursery.

The SEC alleged that the scheme involved a series of “intricate” transactions by Weston Capital Asset Management, which serves private clients, their trusts, and pension funds, and two of its unregistered hedge funds, Weston Capital Partners Master Fund II and the Wimbledon Fund SPC Class TT Segregated Portfolio.

In one transaction, the SEC alleged that Bergstein misappropriated at least $2.3 million that was purportedly meant for investments in medical-billing businesses and helped Weston Capital Asset Management conceal the true nature of the transaction from investors.

In a second allegedly illicit transaction, he stole more than $3.5 million of funds also purportedly meant for investments in medical-billing businesses.

“The use of elaborate corporate transactions to mask old-fashioned theft of investor monies will not prevent the SEC from enforcing the federal securities laws and protecting investors,” said Andrew Calamari, director of the SEC’s New York regional office.

The case continues.

Family Wealth Report will continue to monitor this case and will provide news updates accordingly.