Donald F Lathen Jr

A hedge-fund manager, Donald “Jay” Lathen, Jr paid terminally ill patients to use their names in a bond-buying scheme that generated $9.5 million in profits, a U.S. securities regulator said. He was charged with fraud after putting the patients’ names on joint brokerage accounts, along with his own, so he could buy bonds for his fund and profit by selling them back to issuers when the patients died. According to the SEC’s complaint, the 48-year-old hedge fund manager used contacts at nursing homes and hospices to help him identify patients who had less than six months to live. He promised the patients $10,000 in exchange for becoming a joint account owner. Lathen promoted an “end of life financial assistance program” to the terminally ill through EndCare, a company he founded in 2009, to induce them to sign on to the joint accounts, the SEC said. Lathen launched Eden Arc Capital Partners, LP in 2011. From May 2011 through September 2015, the fund claimed total returns of 74.7 percent. It managed about $52 million at its peak, but that declined to $31 million in January 2016. Prior to Eden, Lathen was an energy investment banker at Citigroup Inc and Lehman Brothers.