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Hedge Fund Missing $28 Million Charged With Commodity Fraud

A hedge fund and its top executive have been charged in Atlanta federal court with commodity fraud after an audit by an industry self-regulator showed the fund could not account for about $28 million of its reported value.

The Commodity Futures Trading Commission named Renaissance Asset Management LLC, a hedge fund based in Roswell, Ga., and CEO Anthony Ramunno Jr. of Atlanta in a civil lawsuit filed in the U.S. District Court for the Northern District of Georgia.

Renaissance trades futures and other securities in the U.S. commodities markets, the suit says.

In mid-January the National Futures Association, an industry self-regulating organization, initiated an "emergency audit" of Renaissance based on "suspicions" raised by a potential investor, the suit says.

According to the CFTC, the NFA's "partial and ongoing" audit so far shows the fund holds assets of $4 million despite a 2006 report claiming assets of $32 million.

The agency says Ramunno has admitted to NFA staff and to the FBI that Renaissance's recent annual reports are fraudulent.

The suspicious investor doubted the soundness of Renaissance after reading the fund's 2004 and 2005 reports, according to the suit.

While the reports claim to have been audited by accounting firm Grant Thornton LLP, the firm has never performed services for Renaissance, the CFTC says.

The agency is demanding unspecified fines and refunds for about 95 defrauded investors.