You ever hear of one of Karen the Supertrader’s Clients suing her?

[JSOP]

There’s a bit of a misconception here that just because Karen Bruton paid a $1.5M fine that it’s the same as getting a speeding ticket dropped in exchange for attending driving school. She consented, she agreed to, a federal judgement against her. Nowhere in that agreement does she deny wrongdoing. It’s a better outcome than a trial judge’s verdict but let there be no doubt - that judgement, disgorgement, and civil penalty follows her everywhere.

At present Karen Bruton is not allowed to register as a Certified Public Accountant. She is banned from regerstering until an SEC public hearing can be held.

https://www.sec.gov/litigation/opinions/2018/34-84627.pdf

“On September 13, 2018, Bruton consented to entry by the district court of a final judgment against her. The judgment ordered Bruton to pay disgorgement and civil monetary penalties. It also permanently enjoined her from future violations of Advisers Act Sections 206(1), (2) and (4) and Rule 206(4)-8 thereunder.”

I thought I read somewhere that Karen the supertrader was actually found guilty of something and was charged with penalties not just being investigated and sued. This makes sense. You can't just go on forever as if nothing happened when you've actually made losses and were just hiding them by rolling forward and then present the profits to clients to collect fees. Now she can't even practice as an accountant. That's harsh! She's lost her original profession as well. I never knew that financial regulatory bodies can do that, revoking your credential and accreditation in a totally different and unrelated field!!

Well I guess now she can either manage her own money or manage a pool of funds of < $400K and < 15 clients that is if people still would trust her with their money or start an investment column and charge people for investment advice. She's still allowed to all those three.

 

[JSOP]

You’re asking me to guess.

Her retirement situation is not “sweet” if I had to guess. She went to great lengths to compel the SEC to reinstate her CPA eligibility. (Which she lost). That tells me that at 69 years old she needs to be preparing tax returns and small business books in order to make ends meet. The disgorgement figure was a very odd number - which leads me to guess that the Feds were looking for more but agreed to what she could produce. That also lends credence to the Fed’s allegation that she made money on management fees, and she never made any money on performance fees (profits) to speak of.

As a hedge fund, you get to earn fees on profit AND on management even if the fund is making losses? Wow!! No wonder everybody wants to open hedge funds. LOL Well now she can always do taxes for people in private for cash. People who have no credential do that all the time. Or she should just trade for herself. She is "Karen the Supertrader" well she can still supertrade for herself right? I mean we are no supertraders and we are all trading for ourselves. LOL

She will NEVER get registered to handle OPM with the NFA. The NFA is very strict about ethics and professional conduct with client money. If she’s honest with a State Professional Licensing Board I have grave doubts that they would grant her an accounting license.

I’m just guessing - I wish her no ill will, but there is no rational objective dispute that she was unethical at the very least and likely fraudulent.

Well she made losses without disclosing them. That's fraud to me. I mean I understand she was rolling the options forward to defer the losses and hoping to land in profit but losses were made before she rolled them forward so she should've disclosed them. It's strange though that even though SEC still believes that she has made an actual loss of $50 million, none of her clients have sued her? That's the title of this thread. Has she been sued by any of her clients?

 

[bone]

You can't just go on forever as if nothing happened when you've actually made losses and were just hiding them by rolling forward and then present the profits to clients to collect fees. Now she can't even practice as an accountant. That's harsh! She's lost her original profession as well. I never knew that financial regulatory bodies can do that, revoking your credential and accreditation in a totally different and unrelated field!!.

Actually the SEC is indeed the cognizant regulatory body for accounting standards and practices in the US.

Think about it this way: should a Certified Public Accountant who submitted false, fraudulent accounting statements to multiple clients over a protracted period of time be allowed to continue to submit and certify accounting statements for future clients? That’s probably not a good idea.

 

[JSOP]

Actually the SEC is indeed the cognizant regulatory body for accounting standards and practices in the US.

Think about it this way: should a Certified Public Accountant who submitted false, fraudulent accounting statements to multiple clients over a protracted period of time be allowed to continue to submit and certify accounting statements for future clients? That’s probably not a good idea.

Oh I see. I didn't know SEC oversees Accounting standards as well. Yeah makes sense. She engaged in unethical accounting practices as well.

 

[Pekelo]

Her retirement situation is not “sweet” if I had to guess. That tells me that at 69 years old she needs to be preparing tax returns and small business books in order to make ends meet.

And here we have to disagree. She had 3-4 good years managing 100+ M before the loss and while the court case was proceeding she was STILL managing around the same size account, so that is at least one more good year, while her strategy has been working fine.

You know better than me, so make an educated guess how much a HF manager makes in 5 good years, managing that much money. She only paid 1.5M as penalty, even with lawyers' fees that is less than just one year salary.

So unless a few more of her costumers sue her now AND manage to get some bucks out of her (unlikely), she is sitting pretty in retirement and probably have enough dough on her own to trade.

I don't think she needs to worry about preparing tax returns for OTHERS...

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In a way, the court case helped her. While she was making the scheme trades the money was tied down and she couldn't make profits, just breaking even while carrying the losses. Once the loss was realized, she was able to go back and write puts in Sweet Bobby style and make money....

 

[Sweet Bobby]

And not one shred of evidence that she’s been sued by anybody! That’s amazing isn’t it?

 

[Sweet Bobby]

Karen should sell her life story and write a book and make a blockbuster movie!

 

[bone]

And here we have to disagree. She had 3-4 good years managing 100+ M before the loss and while the court case was proceeding she was STILL managing around the same size account, so that is at least one more good year, while her strategy has been working fine..

Where do you Karen fanboyz conclude that she was doing so great for such a long time ? Look at the SEC filings. The SEC filings state that the NFA performed an audit and found that she had actually LOST $50M and was rolling the losses forward used long dated options expiries whilst issuing fraudulent account statements to clients. She’s a mini-Madoff.

I mean, who TF trades options exclusively and doesn’t concern themselves with Delta?

 

[bone]

Karen should sell her life story and write a book and make a blockbuster movie!

She cannot personally profit from a crime. Most States have laws requiring book publishers and movie producers to place royalties into a State Administered Fund for disbursement to the victims. Most of her disgorgement to the SEC is also disbursed to the victims of her fraud.

 

[bone]

And not one shred of evidence that she’s been sued by anybody! That’s amazing isn’t it?

What, just because no yahoo on Elite Trader of all places has any clue whether Karen Bruton has a civil suit pending in a State court somewhere that counts as proof positive? This is not exactly the ABA message board.

She just formally agreed with the government that she committed fraud. If she has any assets she’ll get sued and will lose in civil court. Her risk disclosure to clients is worthless when there’s a massive fraud perpetuated. According to the NFA audit her stupid strategy lost at least half of their money, but she chose to continuously roll dated calendar options pairs and didn’t report half of the legs to clients in order to show a profit and for her to collect fees. She’s a mini-Madoff.