SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17227 \ November 13, 2001
SECURITIES AND EXCHANGE COMMISSION v. PETER W. CHABOT, CHABOT
INVESTMENTS, INC., SIRENS INVESTMENTS, INC., SIRENS SYNERGY AND THE
SYNERGY FUND, LLCCivil Action No. 01CV 9976 (AGS)(S.D.N.Y.)(filed
November 13, 2001).
SEC CHARGES OFFSHORE HEDGE FUND AND ITS 26 YEAR OLD MANAGER WITH
FRAUD, OBTAINS EMERGENCY RELIEF
On November 13, 2001, the Securities and Exchange Commission filed an
emergency enforcement action in the U.S. District Court for the
Southern District of New York and obtained a temporary restraining
order prohibiting Peter W. Chabot ("Chabot"), manager of a purported
offshore hedge fund named Sirens Synergy and The Synergy Fund LLC (the
"Fund"), from engaging in the fraudulent offer and sale of securities.
The Commission also sued and obtained temporary restraining orders
against the Fund and against Chabot Investments, Inc. and Sirens
Investments, Inc., two investment entities associated with Chabot and
the Fund.
The Commission's complaint alleges that, beginning in 1999, Chabot,
individually and through his entities, raised over $1.2 million from
approximately 14 investors by making material misrepresentations and
omissions to them concerning the Fund. Chabot claimed he was an
experienced trader and that he had developed a mathematical model to
predict when to buy stocks and whether to take long or short
positions. Chabot then prepared false and misleading account
statements for the investors, claiming large returns on the purported
investments made by the Fund. By July 2001, account statements sent to
investors claimed that the Fund had assets exceeding $130 million.
As alleged in the Commission's complaint, Chabot did not buy stocks or
other securities with investors' funds. Instead, he used their money
for his personal expenses. Chabot spent over $100,000 on consumer
goods and services, including computers, clothes (such as Armani
suits), travel to Spain, France, England, and the Caribbean, limousine
services, New York Knicks basketball games at Madison Square Garden,
furniture, oriental rugs, and jewelry. Chabot also made over 130 ATM
withdrawals totaling nearly $60,000 from a bank account containing
investor funds. On November 5, 2001, Chabot was arrested in
Mississippi on his way to Mexico and charged with one count of
securities fraud.
In addition to temporary restraining orders prohibiting further
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. PETER W. CHABOT,
INVESTMENTS, INC., SIRENS INVESTMENTS, INC., SIRENS SYNERGY AND THE
SYNERGY FUND, LLCCivil Action No. 01CV 9976.
SEC CHARGES OFFSHORE HEDGE FUND AND ITS 26 YEAR OLD MANAGER WITH
FRAUD, OBTAINS EMERGENCY RELIEF
On November 13, 2001, the Securities and Exchange Commission filed an emergency enforcement
The Commission also sued and obtained temporary restraining orders against the Fund and
The Commission's complaint alleges that, beginning in 1999, Chabot, individually and through
Chabot claimed he was an experienced trader and that he had developed a mathematical model to
Chabot then prepared false and misleading account statements for the investors, claiming
account statements sent to investors claimed that the Fund had assets exceeding $130 million.
he used their money for his personal expenses.
Chabot spent over $100,000 on consumer goods and services, including computers, clothes,
On November 5, 2001, Chabot was arrested in Mississippi on his way to Mexico and charged with
In addition to temporary restraining orders prohibiting further violations of the antifraud
The Commission also seeks the following permanent relief permanent injunctions against future
The Commission wishes to thank the U.S. Attorney for the Southern District of New York and
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