Securities Law Blog

On April 23, 2010 the Denver District Court issued a temporary restraining order, freezing the assets of Sean Michael Mueller and his companies, Mueller Capital Management LLC and Mueller Over Under Fund LP. The Greenwood Village, Colorado hedge fund manager has been under investigation by the Colorado State Securities Division for the past month for his alleged involvement in a multi-million dollar Ponzi scheme.

The court order to freeze Mueller’s assets came after Colorado State Securities Commissioner Fred Joseph filed for the order following the receipt of a complaint from an anonymous investor, and learned of Mueller’s failed suicide attempt on April 22, 2010. According to the state securities division, the anonymous investor also “expressed concern that Mueller was effectively operating the fund as a Ponzi scheme, representing that he has never lost money in any monthly period and providing investors with inflated expectations of returns.”

According to court documents, before attempting to jump off of a 19 story building, Mueller sent an email to investors stating, “I don’t know where to begin, so I will start with, I’m sorry. The stress of life has overwhelmed everything else. Please realize that I didn’t set out to end this way, I always thought I could pull it out in the end but events sped up to end that dream.”

According to Joseph, Mueller claimed to have a complicated investment strategy to make it sound like investors could make a lot of money. In a memorandum for the Fund filed in 2002, Mueller allegedly asked for a minimum investment of $500,000 into the Over Under Fund, claiming the fund would attempt to raise $100 million. He allegedly stated that the Fund would engage in short-term trading of stocks and would borrow money in order to leverage investors’ funds, according to court documents.