A Manhattan judge sentenced a hedge fund manager to probation rather than prison for securities fraud, saying that the defendant had taken responsibility for his crimes quickly.
U.S. District Judge Robert Sweet sentenced Owen Li, the founder of Canarsie Capital LLC, to probation. The judge earlier indicated that he was likely to give Li a five-year prison sentence, which was in line with the recommendations of prosecutors and less than the sentence advised by federal guidelines. The judge reconsidered, saying that Li had done “all a human being could do” to “clean up the tragedy” and take responsibility for his crimes.
In December, Li pleaded guilty to securities fraud and making a false statement. Over a period of three weeks in January 2015, Li lost nearly all of the $57 million in investments that he was overseeing, after moving most of the portfolio into market index options whose value collapsed soon afterwards. Prosecutors said that Li misled the U.S. Securities and Exchange Commission and overstated the performance of the fund to investors.
Assistant U.S. Attorney Michael Ferrara said that Li showed “exceptional” cooperation, but a prison term would still be justified as a deterrent to others.
Securities fraud charges can be complex and may involve related investigations by multiple agencies. Anyone accused of financial crimes needs representation by an attorney with extensive experience in these matters.