The SEC announced that, on 1/24/17, former hedge fund manager Clayton Cohn was sentenced to 52 months in prison, to be followed by 2 years of supervised release, and was ordered to pay $1.55 million in restitution to some 37 defrauded investors. On July 5, 2016, Cohn pled guilty to the charges against him.

Cohn, a former Marine who lives in the Chicago area, was the managing member of Market Action Advisors, an investment adviser that managed Market Action Capital Management, a hedged fund created by Cohn. Cohn is alleged to have raised nearly $1.8 million from investors through his hedge fund by lying to investors about his success as a trader, the performance of the hedge fund, his use of investor proceeds, and his personal stake in the hedge fund.

According to the SEC's complaint, … Cohn invested less than half of the money raised from investors and used over $400,000 for personal expenses, including a Hollywood mansion, luxury automobile, and extravagant tabs at high-end nightclubs. As far investing, Cohn lost nearly all of the money invested - covering up his trading losses and misappropriation of investor funds by generating phony hedge fund account statements that claimed annual returns exceeding 200%.