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Hamptons Mayor Pleads Guilty In Fraud To Benefit Hedge Funds

A New York mayor—and head of a Manhattan investment firm—has pleaded guilty to illegally cherry-picking securities in a scheme that earned his firm and two hedge fund accounts he controlled $2.2 million. Despite facing a potential 25-year prison term, George Motz pleaded guilty to securities fraud in federal court in Central Islip, N.Y. Motz, the president and CEO of Melhado, Flynn & Associates, admitted that he favored his proprietary accounts, including the hedge fund accounts, over those of his clients. While the scheme earned Melhado millions, it cost the clients left with money-losing trades $1.4 million. Full Story...