The SEC has charged Nicholas Lattanzio, a New Jersey man who was allegedly posing as a
hedge fund manager, with fraud. According to the SEC, Lattanzio promised a number
of small businesses substantial returns if they invested in Black Diamond
Capital Appreciation Fund, a hedge fund that Lattanzio said he controlled.
According to the SEC’s charges, Lattanzio bilked investors out of
The SEC alleges that Lattanzio promised investors that they could withdraw
their money if the investment didn’t work out. He also allegedly
claimed, falsely, that Black Diamond possessed $800 million in assets
under management and regularly generated double-digit returns. In reality,
according to the SEC’s complaint, Black Diamond never had more than
Lattanzio allegedly used most of the money generated by the scheme on himself
and his family, purchasing things like a million-dollar home, a luxury
car, and jewelry.
Small businesses have a legitimate need for financing, and Lattanzio allegedly
took advantage of this. According to the Director of the SEC’s New
York Office, Lattanzio “falsely reassured his investors they were
earning profits while he was swiping their money to bankroll his affluent
lifestyle that he otherwise could not afford.”
In addition to the SEC’s fraud charges, the U.S. Attorney for the
District of New Jersey announced criminal actions against Lattanzio.