Gibraltar Asset Management Steals $8 Million From Children's Center
Investment News and Bloomberg News have reported that Gibraltar Asset Management Group has allegedly stolen $8 million of the $17 million endowment from the Hillcrest Children’s Center, formerly the Washington City Orphan Asylum. Hillcrest was founded as an orphanage in 1815 to help children left homeless by the War of 1812. More recently it has tended to the mental health needs of local children and families.
When the presentation was made to the Center, Gibraltar persuaded them to use a covered call strategy whereby the money managers would buy stock and simultaneously sell call options on the shares. They represented that their money managers always made money trading options in any market conditions and the risk is always limited, according to the description in the lawsuit.
Hillcrest says that they invested $8 million with Gibraltar Asset Management in February 2009 and that it dwindled to $25,000 within a little over a year. As early as May 2009, the suit says that some $6,650,000 had been withdrawn from their account without Hillcrest’s knowledge.