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SEC: Hedge Fund’s Winnebago Offer Fraudulent

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March 14, 2014 by   Leave a Comment

The Securities and Exchange Commission (SEC) has filed settled fraud charges against Alexander HG Mascioli and his alter-ego, purported hedge fund, North Street Capital (NSC).

As reported by HedgeWeek, the charges allege that Mascioli and NSC made a fraudulent offer in May, 2012, offer to acquire all outstanding shares of Winnebago Industries Inc.’s common stock.

In a statement, Winnebago said, “We are pleased that this matter has been brought to a close and we can put it behind us. We did not believe the offer was credible at the time and the proposed judgment against Mr. Mascioli and North Street Capital confirms that belief.”

The commission alleges that on May 9, 2012, Mascioli authored on NSC letterhead, signed, and sent to Winnebago an offer to acquire all outstanding common stock of the company for approximately $321 million in cash.

The May 9 letter represented that NSC’s offer was not conditioned on any financing, that NSC was prepared to move forward immediately, and that it could complete the process in approximately two weeks. In truth, Mascioli and NSC had virtually no assets, significant liabilities, and no reasonable prospects of securing any financing to fund the acquisition.

Furthermore, at the time they made their offer, Mascioli and NSC had not retained any financial or legal advisers to represent them in the transaction. On May 17, having not received a response to the May 9 offer, Mascioli sent a copy of theletter that he had modified to look like an NSC press release to Bloomberg, which subsequently posted the offer on its website.

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