The self-described “youngest African-American hedge fund founder in history” pleaded guilty on Friday to stealing over $1 million from investors.
Financial Advisors reported that 29-year-old Frederick Douglas Scott, the CEO of New York-based ACI Capital Group, waived indictment and pleaded guilty to wire fraud conspiracy and lying to Securities and Exchange Commission officials who were conducting a regulatory examination of his firm. He admitted to using the money to fund his own lavish lifestyle.
Scott faces up to 25 years in prison for both charges. He has also been ordered to pay a $1.3 million restitution and a fine equal to double the investors’ losses.
SEC had charged Scott with defrauding investors and falsely claiming his firm’s assets under management to be $3.7 billion to bolster his credibility.