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by Mike Caswell

The U.S. Securities and Exchange Commission has entered a $2.87-million order against Peter Kuperman, a Toronto fund manager who the regulator claims lied to investors while placing their money into a worthless penny stock. (All figures are in U.S. dollars.) The SEC says that Mr. Kuperman kept a floundering fund going for years while hiding substantial losses. The scheme included investing all of the fund's money in an illiquid OTC Bulletin Board listing.

The sanctions against Mr. Kuperman are contained in an administrative order the SEC released on Thursday, Jan. 28. The order identifies Mr. Kuperman as a Canadian who lived in the U.S. from 1992 to 2008. He ran a fund management company called QED Benchmark Management LLC, which had an office in New York until 2009, when it moved to Toronto.

The problems, as described by the SEC, came in connection with a fund that Mr. Kuperman formed in 2004. Over a period of several years, he obtained $1.2-million from investors for the fund. It appears that all went well until February, 2009, when the fund started underperforming and generating negative returns, the SEC says.

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