Chicago Investment Fund Manager Charged in Alleged Ponzi Scheme

Neal Goyal, the owner of Blue Horizon Asset Management LLC and Caldera Advisors LLC, has been accused by the Securities and Exchange Commission of defrauding at least 35 investors out of more than $11.4 million in a Ponzi scheme.  The suit was filed on Wednesday in Northern District Court and alleges that Goyal never invested the majority of the money he received from investors and instead using it on personal spending, including funding his wife’s baby boutique.  The limited trading that Goyal did perform resulted in significant losses.

According to the suit, Goyal raised over $7 million from investors through offering and selling limited partnerships in three Blue Horizon funds and a Caldera Equity Fund by making false representations about the intended use of the funds.

Goyal, 33, is accused of using what is known as a “long-short” trading strategy, meaning that the funds would purchase certain equity securities while selling short other equity securities. The suit alleges that Goyal also represented to investors that the funds were consistently outperforming the stock market and that he created and sent investors fictitious account statements for the funds they invested in.  When investors attempted to cash out the fund, the SEC claims that Goyal made payments to investors based on the inflated amounts represented in the account statement.

The SEC has requested a jury trial, for Goyal to return the money to investors, and appropriate penalties as decided by the court.

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