Fund manager sued in fraud case

U.S. regulators sued San Francisco hedge fund manager Alexander James Trabulse, claiming that he fraudulently overstated investment returns while spending clients’ money on family shopping sprees.

Trabulse, 60, falsified account statements since 1998 to inflate profits at his hedge fund, known as Fahey Fund LP and Fahey Financial Group Inc., by as much as 200%, the Securities and Exchange Commission said in a civil lawsuit filed Wednesday in federal court in San Francisco.

Meantime, he used the fund’s money to buy jewelry, rugs and to cover his ex-wife’s overseas shopping allowance, the agency said.

From 1998 to 2006, Trabulse reported about $30 million in profits on behalf of more than 100 investors, even though investment returns amounted to less than $10 million, the lawsuit alleged.

Trabulse’s attorney didn’t immediately return a phone call seeking comment.