Hedge Fund Manager Gets a 14-Year Prison Sentence for Fraud

The orchestrator of a multimillion-dollar Ponzi scheme has landed himself a 14½- year prison sentence.

Raymond K. Montoya, who managed a Boston hedge fund called the RMA Strategic Opportunity Fund, was convicted Thursday by a Massachusetts federal court, according to the Department of Justice.

Between 2009 and 2017, the 70-year-old Allston resident had been telling clients that the pooled investment fund was performing well, when in fact it had been doing the opposite. Montoya also promised he would invest their millions from personal savings and 401(k) plans in stocks and bonds, which he did, with just a small fraction of the clients’ money. The rest was used to finance Montoya’s lifestyle and his son’s mortgage.

Senior District Court Judge George A. O’Toole Jr. sentenced the hedge manager Thursday to 175 months in prison with three years of probation. He must also pay a restitution to be determined at a later date.

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RMA’s investors included Montoya’s friends, family, and acquaintances residing in Massachusetts, Ohio, and California.

Montoya pleaded guilty to three counts of wire fraud, five counts of mail fraud, and two counts of conducting an unlawful monetary transaction last October. He had been previously charged with securities fraud in a civil complaint by the Massachusetts Securities Division.

Montoya had been telling clients RMA managed $4 billion in assets. He really held less than $150 million.

The Massachusetts district court could not be reached for comment.

Tags: Fraud, Hedge Fund, Lawsuits, Raymond Montoya, RMA Strategic Opportunity Fund

BNP Paribas Asset Management (BNPP AM), which manages €399 billion ($453.8 billion) in assets, said it plans to implement a new coal-exclusion policy that will come into effect at the start of next year and target companies that mine thermal coal and generate electricity from coal.

The policy will apply to all of the firm’s actively managed open-ended funds and will become the default policy for segregated mandates.

“From an investment perspective the outlook for the coal industry looks increasingly uncertain as less carbon-intensive fuel sources, in particular renewables, become ever more competitive,” Mark Lewis, global head of sustainability research at BNPP AM, said in a release.

“The main renewable technologies already compete favorably with fossil fuel power generation, and in the best locations for wind and solar globally, new build costs are actually below those of existing fossil-fuel plants.”

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According to the new policy, the firm will exclude companies that derive more than 10% of their revenue from mining thermal coal and/or account for 1% or more of total global production. It said the global production limit will capture those companies whose share of revenue from coal is below 10%, but which still account for “a meaningful level of production.”

BNP will also exclude power generators whose carbon intensity is above the 2017 global average of 491 gCO2/kWh, and will lower this threshold to 327 gCO2/kWh by 2025 in order to fall in line with the International Energy Agency’s (IEA) Sustainable Development Scenario.

“BNPP AM acknowledges the importance of encouraging companies to reduce their dependence on coal mining and coal-fired power generation in order to align their activities with the Paris Agreement,” said the firm in announcing the new policy. “It will therefore consider exceptions for those miners and power generators that make credible commitments to reducing their coal-based activities to levels consistent with the Paris Agreement within the required time frame.”

The company said the credibility of commitments will be determined using quantitative and qualitative criteria, including disposal plans for coal assets or acquisition plans for lower-carbon generation capacity. Exemptions will be granted on a half-yearly basis, with companies demonstrating their commitment to the policy expected to comply within two years.

“Coal combustion is the largest single source of global warming, while the power sector itself is the largest single source of coal combustion,” said BNP. “Reducing emissions from coal is therefore the most effective way of moving towards an energy system consistent with the Paris Agreement.”

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Tags: BNB Paribas, coal, Coal Exclusion, ESG