A federal court has ordered the freezing of assets of a Stamford, Conn., investment adviser and hedge fund manager that has been charged with using $53 million from investors for his own benefit.

The Securities and Exchange Commission said it obtained the order freezing the assets of Michael Kenwood Capital Management and Francisco Illarramendi, who is the majority owner of the Michael Kenwood Group.

The SEC charged that Illarramendi defrauded investors in several hedge funds he managed by improperly transferring their money into bank accounts that he personally controlled. He then invested the money for his own benefit, the SEC said.

Illarramendi could not be reached Friday for comment at Michael Kenwood Capital Management in Stamford and no one by that name was listed in the company's automated telephone directory. Web sites for Michael Kenwood Group and Michael Kenwood Capital Managment were both "down for maintenance" at 1:55 p.m. Friday.

“Illarramendi treated his clients’ money like it was his own, diverting millions of dollars that did not belong to him,” said David P. Bergers, Director of the SEC’s Boston Regional Office.

According to the SEC's original complaint, filed on Jan. 14, 2011, in U.S. District Court for the District of Connecticut, Illarramendi managed as much as $540 million in assets for hedge funds at Michael Kenwood Capital Management.

The SEC sought an asset freeze and other emergency relief because it alleged that Illarramendi was imminently planning to make additional investments using investor funds without the knowledge or consent of the investors.



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