Hedge Funds

Former Lipper trader pleads guilty to fraud

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Former Lipper Holdings LLC trader Edward Strafaci pleaded guilty yesterday in a Manhattan Federal Court to charges of securities fraud for overstating the value of two of the firm's hedge funds, according to wire service reports.

New Jersey resident Strafaci faces up to 10 years in prison and will be sentenced on December 2. Strafaci admitted he deceived investors when he overvalued two Lipper hedge funds by overestimating their convertible securities and preferred stock from 1998 to 2002, when he resigned from the firm. Prosecutors say one of those funds was valued at $722 million but liquidated at $365