Ridgefield Hedge Fund Executives Plead 'Guilty' to Wire Fraud

Three former executives of Ridgefield-based New Stream Capital, LLC, pleaded ‘guilty’ Wednesday to federal conspiracy charges for trying to deceive investors.

David Bryson, 45, Richard Pereira, 42, both of Ridgefield, and Bart Gutekunst, 62, of Weston, were charged with one count each of conspiracy to commit wire fraud, which carries a maximum sentence of 5 year in prison.

According to court documents and statements made in court, in November 2007, New Stream launched new feeder funds, one based in the U.S. and a series of funds based in the Cayman Islands. New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund.

Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, Bryson, Gutekunst and Pereira set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption. 

As part of the scheme, Bryson, Gutekunst and Pereira had New Stream staff secretly reorganize the fund structure so as to effectuate the priority change.

New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund. Moreover, New Stream continued to market itself to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.

All three were arrested on conspiracy charges in February 2013.

After their guilty pleas Wednesday, Bryson and Gutekunst were both released on $5 million bond pending sentencing; Pereira was released on $300,000 bond. All three men are scheduled to be sentenced in August.