Hedge Fund Manager Used Terminally Ill Patients for Profit

Posted on August 30th, 2016 at 5:10 PM
Hedge Fund Manager Used Terminally Ill Patients for Profit

From the Desk of Jim Eccleston at Eccleston Law LLC:

The SEC has filed a complaint against 48 year old Donald "Jay" Lathen, Jr., who manages Eden Arc Capital Management LLC.  Mr. Lathen was charged with fraud after using contacts at nursing homes and hospices to help him identify patients who had less than six months to live. He solicited the dying patients and promised them $10,000 in exchange for becoming a joint account owner in all the investments that were sold. Lathen opened 60 such accounts since May 2011.

Using those accounts, Lathen through Eden Arc purchased bonds and certificates of deposit. The purchased bonds and CDs included “death puts" that allowed a deceased person's beneficiaries to sell the bonds back to the issuers at full par value. The strategy earned money because Eden Arc initially bought the bonds in secondary markets for less than par. As patients died, Lathen sent letters to issuers reflecting that he was the joint owner, and he collected on his investments.  

SEC Complaint: https://www.sec.gov/litigation/admin/2016/33-10120.pdf

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

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