Investment Adviser Charged in Ponzi Scam

In a press release, the U.S. Attorney's office in Manhattan said Hayim Regensberg, president of Arbco Capital Management LLP and Mid West Trading LLC, has been charged with one count of securities fraud and one count of wire fraud.

Regensberg, 43, faces up to 20 years in prison on each count.

A lawyer for Regensberg didn't immediately return a phone call seeking comment Wednesday.

Prosecutors alleged that Regensberg, of Manhattan, falsely promised several clients that he would invest their money through Arbco Capital and Mid West Trading in various purported high-yield, short-term, low-risk investment opportunities between May 2007 to October 2007, according to a criminal complaint issued in the case.

Regensberg allegedly told clients that he would invest their money in international IPOs or a lending product in which he would loan money to trading institutions on a short-term basis, which he said would serve merely as collateral and would not be placed at risk in those trading companies' investments, according to court documents.

The government said he failed to make those investments and lost clients more than $8 million.

Prosecutors said significant amounts of investors' funds were given to Regensberg's relatives or invested and lost in "highly speculative options trading," according to court documents.