Adviser Charged with Making Misrepresentations

April 13, 2010

The SEC charged Haberman Management Corp. (HMC), a former registered investment adviser based in New York, New York, Haberman Value Fund, L.P. (HVF) and Ross L. Haberman with violating the anti-fraud provisions of the Securities Exchange Act of 1934 (Exchange Act) and the Investment Advisers Act of 1940 (Advisers Act).

From at least January 2004 through at least March 2009, the SEC stated that Haberman, through his control of HMC, and as sole General Partner of HVF, opened numerous bank accounts in his name using HVF assets to purchase shares in banks converting from mutual to stock ownership, and then either transferred those shares to HVF or misappropriated some or all of the proceeds from the sale of those shares. Haberman's misrepresentations to the banks deprived other possible participants in stock offerings of the opportunity to purchase the shares purchased by Haberman. HVF realized profits of $191,943 and Haberman realized profits of $164,186, of which he returned $87,453, including interest, to HVF in 2009.  The SEC also stated that Haberman also caused HMC to misrepresent HVF's performance in marketing material, and caused HMC to violate Advisers Act custody and books and records provisions.

Click to access the administrative order.


Enforcement Actions, Investment Advisers