SEC sues former Wayzata hedge fund

More than 50 Minnesotans may be out nearly $16 million that they invested with a onetime Wayzata-based hedge fund, according to a lawsuit filed Wednesday by the Securities and Exchange Commission (SEC) in federal court in Minneapolis. The government is attempting to shut the fund down before any money that's left disappears.

The SEC alleges that former Minneapolis resident John Lawton misled investors about the successes of the fund, Paramount Partners, and overstated its balance sheet to hide some losses.