The Securities and Exchange Commission has filed an emergency enforcement action against the manager of a purported offshore hedge fund, who the SEC says is engaged in fraud.

The action, filed in the U.S. District Court for the Southern District of New York, granted the SEC a temporary restraining order prohibiting Peter Chabot, Sirens Synergy and The Synergy Fund, from engaging in the fraudulent offer and sale of securities.

The commission also sued and obtained TROs against the fund and against Chabot Investments Inc. and Sirens Investments Inc., two investment entities associated with Chabot and the fund.

The commission’s complaint alleges that, beginning in 1999, Chabot, individually and through his entities, raised over $1.2 million from approximately 14 investors by making material misrepresentations and omissions to them concerning the fund.

Chabot claimed he was an experienced trader and that he had developed a mathematical model to predict when to buy stocks and whether to take long or short positions. Chabot then prepared false and misleading account statements for the investors, claiming large returns on the purported investments made by the fund.

The commission alleges that Chabot did not buy stocks or other securities with investors’ funds. Instead, he used their money for his personal expenses. He spent over $100,000 on consumer goods and services, including computers, Armani suits, travel to Spain, France, England, and the Caribbean, limousine services, New York Knicks tickets, furniture, oriental rugs, and jewelry.

Chabot also made over 130 ATM withdrawals totaling nearly $60,000 from a bank account containing investor funds. On November 5, 2001, Chabot was arrested in Mississippi on his way to Mexico and charged with one count of securities fraud.

In addition to the TROs, the court ordered an asset freeze, expedited discovery, an accounting, and other interim relief. It is seeking trading bans, disgorgement and civil money penalties against him.