A Florida fund manager has given the industry a black eye. While the fund industry has a squeaky-clean image as an honest industry, in recent years there have been a growing number of incidents that may raise questions in the minds of some investors.

The latest case concluded yesterday in Florida. Steven H. Adler, former portfolio manager of the ASM Index 30 Fund was convicted on 20 counts of mail fraud and wire fraud in a trial brought by the Tampa US Attorney's office.

The ASM fund was advised by Adler's Vector Index Advisors and was supposed to mimic the Dow Jones Industrial Average. The fund never reached profitability and the independent director fired Vector after shareholders complained that fund assets were being diverted to the advisor.

The fund is now subadvised buy Orbitex Advisors and is known as the Orbitex Focus 30 Fund.

The jury found that the 64-year-old Tampa resident pocketed nearly $2 million that investors had sent to the fund. Already facing a life time bar from the securities industry by the NASD, Adler now faces up to 100 years imprisonment and a $250,000 fine for the crime when he is sentenced on April 9. Each of the 20 counts carries a maximum of five years.

Shortly after that, the independent directors of the fund dismissed Mr. Adler and his firm as portfolio manager and the SEC began investigating.  

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