WALTHAM MAN CONVICTED OF INVESTMENT FRAUD

Boston, MA... A Waltham man pleaded guilty in federal court on Monday, October 23, 2006, to defrauding more than fifty victims in an investment fraud scheme.

United States Attorney Michael J. Sullivan and Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced that MARK R. CONWAY, age 45, of 237 Moody Street, Waltham, pleaded guilty before U.S. District Judge Patti B. Saris to an Information charging him with thirteen counts of mail and wire fraud.

At the plea hearing, the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that from approximately January, 2001 to October, 2005, CONWAY acted as the managing partner of Groundswell Partners LLC, the General Partner and management company for Groundswell Capital LP, a quantitative systematic hedge fund doing business in Massachusetts. As managing partner, CONWAY made numerous misrepresentations to investors including that the hedge fund would follow a specific market timing investment strategy devised in part by CONWAY. In fact, CONWAY, the sole trader for the fund, ceased using the promised investment strategy without notice to, or the approval of, the investors. In order to hide this deviation from the promised strategy, CONWAY created and distributed false documentation for the purpose of inducing investors to transmit additional investment monies, concealing the true status of the hedge fund account and its trading history, and causing existing investors to leave their funds under CONWAY=s management. CONWAY received a fee for his management of the investment funds.

Upon detection of the fraud, the government seized more than $14 million in proceeds from accounts in the name of Groundswell Capital LP. The government successfully sought the forfeiture of those funds as well as a money judgment against CONWAY in the amount of the missing proceeds, which total approximately $5 million. Fifty four victims invested in excess of $25 million with CONWAY on the basis of his misrepresentations. The government will seek to restore the forfeited funds to his victims and will also seek a further restitution order in the amount of approximately $5 million.

Judge Saris scheduled sentencing for January 24, 2007 at 2:00 p.m. CONWAY faces up to 20 years in prison, to be followed by 3 years of supervised release and a $250,000 fine.

The case was investigated by the Federal Bureau of Investigation with assistance from the U.S. Securities and Exchange Commission. It is being prosecuted by Assistant U.S. Attorney Lori Holik in Sullivan’s Economic Crimes Unit and Assistant U.S. Attorney Kristina Barclay, Chief of Sullivan’s Asset Forfeiture Unit.

Press Contact: Samantha Martin, (617) 748-3139