The Securities and Exchange Commission charged a Colorado investment adviser with deceiving elderly clients about the safety of putting their money into hedge funds.

In an action announced Tuesday, the agency's Division of Enforcement said Neal R. Greenberg of Boulder, Colo., " falsely stated" that the Agile hedge funds offered and managed by two investment advisory firms he controlled "were suitable for conservative investors who were retired or nearing retirement."

According to the SEC, the Agile hedge funds borrowed significant amounts of money against their clients' funds and concentrated the combined funds in investments in a small number of investments, which is risky.

The funds, in fact, "suffered substantial losses in September 2008 and ceased redemptions to investors,'' the Division of Enforcement said.

September 2008 was when Lehman Brothers collapsed, the federal bailouts of American International Group and large U.S.-based banks and the global financial crisis began. The SEC did not note the connection with that timing, in its announcement.

"Greenberg misrepresented the diversification, risks and fees involved with investing in the Agile hedge funds to conservative investors who were dependent upon their investment income for some or all of their living expenses," said Donald M. Hoerl, Director of the SEC's Denver Regional Office. "Greenberg's unsuitable recommendations and misrepresentations deceived his advisory clients into believing their money was safe with him."

The SEC instituted administrative and cease-and-desist proceedings against Greenberg, noting the Agile hedge funds held approximately $174 million of capital from more than 100 investors when Greenberg suspended redemptions in September 2008.

According to the SEC's order, the majority of Greenberg's advisory clients were generally conservative, older investors who wanted low-risk investments offering significant capital protection.

Greenberg was not immediately available for comment.

A religious web site, citing the Denver Post, attributed the losses of 90 percent of Greenberg's assets to the Bernard Madoff and one other Ponzi scheme that fell apart in the wake of the financial crisis. Greenberg was reported to be "a longtime student and patron" of two Buddhist teachers, Chogyam Trungpa Rinpoche and Sakyong Mipham Rinpoche.

Among Greenberg's clients was Colorado gubernatorial candidate Tom Tancredo, according to


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