SEC Brings Action Against Adviser for Misappropriated Hedge Fund Assets

May 3, 2013

The SEC brought an administrative action against Walter V. Gerasimowicz, Meditron Asset Management, LLC (MAM) and Meditron Management Group, LLC (MMG) for misappropriating assets of a hedge fund managed by MAM. The SEC found that, from 2009 through 2011, Gerasimowicz, MAM and MMG misappropriated approximately $2.65 million from their client, the Meditron Fundamental Value/Growth Fund, LLC (Meditron Fund), to provide financial support to SMC Electrical Contracting Inc. (SMC), a private contracting company controlled by Gerasimowicz. The SEC stated that Gerasimowicz, MAM and MMG repeatedly lied or failed to disclose to Meditron Fund investors the deviations from the Meditron Fund’s stated investment strategy and valuation policy. Gerasimowicz and MAM also failed to disclose the conflict of interest posed by their own investment of approximately $2 million in SMC. Gerasimowicz also misrepresented MAM’s regulatory assets under management at $1.1 billion in various published articles authored by Gerasimowicz, and MAM, aided and abetted by Gerasimowicz, violated the custody rule by failing to distribute annual audited financial statements to Meditron Fund investors within the rule’s prescribed time periods.
Click here to access the administrative action.


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Investment Advisers, Investment Companies