SEC Charges Investment Adviser, Its Principal and Affiliates in Two Offering Frauds

August 2, 2011

The SEC brought an administrative action against Brian A. Bjork, the Estate of Joel David Salinas, various related entities (Select Capital), Select Asset Fund I, LLC, and Select Asset Prime Index Fund, LLC, alleging that from 2004 through the present, Bjork offered securities in two fraudulent securities schemes, raising a total of $52 million.  

The SEC further alleged that in the first scheme, Bjork, alongside business associate Salinas, offered investors corporate and other bonds through J. David Group and J. David Financial Group, and raised approximately $39 million from more than 100 investors. According to the SEC, Bjork and Salinas promised investors safe, fixed income from highly-rated corporate and other bonds, but in reality they never acquired the bonds as promised. The SEC noted that in the second scheme, Bjork, through certain funds, offered securities issued by two private funds and raised approximately $13 million from at least 52 investors since August 2007.  According to the SEC, the two funds, which were controlled by Bjork and Select Capital, commingled investor money, failed to provide promised financial statements, and transferred money to fund-affiliated entities in related-party transactions undisclosed to investors.  In addition, the SEC alleged that in making the affiliated loans, the defendants failed to conduct required due diligence and loan-approval procedures that had been promised to investors in the private placement offering memoranda.

Please click here to access the administrative action.


Categories

Enforcement Actions, Investment Advisers