And now it looks as if he could lose his freedom too.
A New York hedge fund founder who before turning age 30 lost nearly all of the roughly $57m he oversaw in less than three weeks is expected to be sentenced to five years in prison after pleading guilty to fraud, a federal judge wrote.
Reuters reports that Owen Li, the founder of Canarsie Capital, is also expected to be required to pay $56.8m of restitution to his investors, and serve three years of supervised release, U.S. District Judge Robert Sweet in Manhattan wrote on Thursday.
The judge is expected to formally sentence Li at an April 21 hearing, and can change his mind.
Prosecutors said his fund suffered catastrophic losses in January 2015 after he had moved nearly its entire portfolio into long, unhedged market index options whose value collapsed as prices moved in the opposite direction.
According to prosecutors, the collapse occurred after Li had lied to his investors by overstating Canarsie's performance, and misled the U.S. Securities and Exchange Commission about trades he had fraudulently reported to conceal his use of leverage and the size of an investment in Facebook Inc.
To access the complete Reuters article hit the link below: