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Ridgefield's David Bryson, 45; Weston's Bart Kutekunst, 62; and Ridgefield's Richard Pereira, 42, all former executives of New Stream Capital pleaded guilty in U.S. District Court in New Haven to a federal conspiracy charge "stemming from a scheme to deceive investors in order to obtain and maintain investments," according to a press release.
Bryson and Gutekunst were managing partners and principals at New Stream and Pereira was the chief financial officer.
Under the scheme, New Stream launched new feeder funds, one based in the United States and a series of funds based in the Cayman Islands, according to court documents and statements made in court, in November 2007. New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund, according to the release.
"Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008," representatives said in the release. "At risk of losing their largest investor, Bryson, Gutekunst and Pereira set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption. As part of the scheme, Bryson, Gutekunst and Pereira had New Stream staff secretly reorganize the fund structure so as to effectuate the priority change."
The company also "failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund," according to the release. The company continued to market to investors "by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund," according to the release.
Bryson, Gutekunst and Pereira each pleaded guilty to one count of conspiracy to commit wire fraud, a charge that carries a maximum prison term of five years, according to the release.
Bryson is scheduled to be sentenced by Chief U.S. District Judge Janet C. Hall on Aug. 19. Gutekunst and Pereira are scheduled to be sentenced by Hall on Aug. 22.
The defendants were arrested Feb. 26, 2013. Bryson and Gutekunst are currently free on $5 million bonds, and Pereira is free on a $300,000 bond.
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