November 28, 2012

BDC Adviser Charged with Overvaluing Assets

The SEC brought administrative actions against three executives at a business development company (BDC) with overstating the BDC’s assets during the financial crisis. The BDC’s portfolio consisted primarily of corporate debt securities and investments in collateralized loan obligations (CLOs). A BDC is a type of investment company registered with the…

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November 26, 2012

Jury Finds that Massachusetts Adviser Defrauded Its Clients

A federal court jury in Boston, Massachusetts returned a verdict of securities fraud liability against registered investment adviser EagleEye Asset Management, LLC, and its sole principal, Jeffrey A. Liskov, both of Plymouth, MA, in connection their fraudulent conduct toward its advisory clients. The SEC had alleged that, between at…

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November 20, 2012

Adviser Charged with Making a Materially False Form ADV Filing and Other Compliance Violations

The SEC brought administrative proceedings against Barthelemy Group LLC ( “BG”), an investment adviser registered with the states of New York and New Jersey for improper SEC registration, materially false Form ADV filings, and compliance and record keeping failures.  BG is owned and managed by Evens Barthelemy.   The…

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November 20, 2012

SEC Charges Mutual Fund Adviser with Failing to Timely Produce Records During an Examination

The SEC found that from December 2010 to mid-2012, EM Capital, a registered investment adviser to a mutual fund located in Moraga, California, and its principal Freeman failed to furnish required books and records upon request by the SEC’s Investment Adviser/Investment Company examination staff. The requested records included financial statements,…

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November 15, 2012

SEC Enforcement Division Continues to Show Results in Safeguarding Investors and Markets

The announced that it filed 734 enforcement actions in the fiscal year that ended September 30, 2012, one shy of last year’s record of 735.  Most significantly, that number included an increasing number of cases involving highly complex products, transactions, and practices, including those related to the financial crisis, trading…

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November 8, 2012

Louisiana Hedge Fund Adviser Charged with Hiding Losses from Mortgage-Backed Securities

The SEC charged a hedge fund manager in Baton Rouge, Louisiana, with defrauding investors by hiding millions of dollars in losses suffered during the financial crisis from investments tied to residential mortgage-backed securities (RMBS). The SEC alleges that Walter A. Morales and his firm Commonwealth Advisors Inc. caused the hedge…

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November 1, 2012

New SEC Division of Investment Management Director Speaks at Conference

Norm Champ, the new Director of the Division of Investment Management of the SEC, spoke at the ALI CLE Conference on Life Insurance Products in Washington, D.C. He began by discussing the challenges the Division of Investment Management faces. He then reviewed a recently published financial literacy study that was…

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