The SEC found that Mary Beth Stevens, the former chief financial officer and chief compliance officer of AA Capital Partners Inc. (AA Capital), an investment adviser, aided and abetted the misappropriation of more than $23 million by AA Capital and its former president, John Orecchio.
The SEC found that, between May 2004 and September 2006, Stevens facilitated Orecchio's and AA Capital's misappropriation of more than $23 million belonging to AA Capital's clients by improperly withdrawing funds from AA Capital's client trust accounts and transferring those funds for Orecchio's personal benefit and to pay the firm's operating expenses. The SEC further finds that Stevens falsely characterized the withdrawals in the monthly account statements she prepared and sent to AA Capital's clients as "capital calls" for legitimate investments.
The SEC also found that Stevens did not fulfill her responsibility as AA Capital's chief financial officer to properly maintain the firm's books and records and that Stevens' failure to keep up-to-date books and records helped conceal Orecchio's and AA Capital's misappropriations from clients.
Click http://www.sec.gov/litigation/admin/2010/ia-2973.pdf to access the administrative action.