We were engaged by the Securities and Exchange Commission to perform an investigation relating to the use of investor funds by a hedge fund manager, and to assess whether or not the financial statements of the hedge fund were recorded in accordance with Generally Accepted Accounting Principles (“GAAP”). Stout performed a sources and uses analysis of company funds covering multiple years based on the bank accounts of the hedge fund, deposition testimony of fact witnesses and other information produced in the case. We ultimately determined that 63% of the funds received from investors were retained personally by the hedge fund manager. Additionally, we determined that the financial statements of the hedge fund were not prepared in accordance with GAAP, nor did they include disclosures required of investment companies under GAAP. Stout’s expert provided a report and testimony regarding our findings at an administrative proceeding before the Securities and Exchange Commission. The hedge fund manager was ultimately found to have violated sections of the Securities Act of 1933, the Exchange Act of 1934, and the Investment Advisers Act of 1940.