Cambridge Hedge Fund Manager Amids To Defrauding Investors

CAMBRIDGE, MA – The owner of two Cambridge-based investment advisory firms admitted to a scheme to defraud investors in federal court this week. Yasuna Murakama, 44, a managing member of MC2 Capital Management LLC and MC2 Canada Capital Management LLC, pleaded guilty to wire fraud, according to the U.S. Attorney's office.

Authorities said Murakami established and managed three hedge funds – the MC2 Capital Partners Fund, MC2 Capital Value Fund and MC2 Capital Canadian Opportunities Fund – through his investment advisory firms. From 2011 to 2016, Murakami diverted millions of dollars of investor funds to business and personal accounts that he controlled, using the money for personal gain, according to the USAO.

Murakami used investor funds to pay for a luxury sports car, international trips, personal credit cards and high-end department stores, authorities said, and attempted to make Ponzi scheme-like payments to earlier investors and place investments in his own name using new contributions.

To defraud investors, Murakami withheld information about the management of the MC2 Canadian Opportunities Fund and provided falsified account statements and tax documentation. This led investors to mistakenly believe their investments were safe, authorities said.

In a parallel action, the SEC announced securities fraud charges against Murakami and his advisory firms in May 2017. Murakami's former business partner, Avi Chiat, was also charged in connection with the scheme.

The Massachusetts Securities Division in January 2017 brought civil charges against Murakami for similar activity.

Murakami faces a sentence of no greater than 20 years in prison, three years of supervised released and a fine of $250,000, or twice the gross gain or loss. He is scheduled to be sentenced April 8.

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