SEC Charges Portfolio Manager for Failure to Disclose Conflict of Interest

August 4, 2011

The SEC brought an administrative action against Patrick L. Martin, the former chief manager of LandOak Securities, LLC, an investment adviser registered with the SEC, since April 2000. LandOak Securities is also a broker-dealer registered with the SEC. Martin is currently the sole owner and principal operator of LandOak Securities and has owned at least 75% of it since April 2003. Prior to that time, Martin owned at least 25% of LandOak Securities. Martin has been a registered representative of LandOak Securities, the registered broker-dealer, from April 1996 to the present.

The SEC found that between July 1997 and July 1998, Martin and Michael A. Atkins sold investors approximately $3.6 million in promissory notes and membership interests in LandOak Mortgage, a Tennessee limited liability company. In July 2002, Martin and Atkins took $1,545,000 from LandOak Mortgage and diverted or loaned it to Tice Technologies, Inc. Martin did not disclose to LandOak Mortgage’s investors, several of whom were advisory clients of LandOak Securities, that Martin had a conflict of interest because he was a director of Tice and owned a substantial stake in that company. Martin also failed to maintain certain books and records required of investment advisers registered with the SEC, and also made false statements and material omissions in LandOak Securities’ Form ADV and amendments filed with the SEC.

The SEC, among other things, barred Martin from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.

Please click here to access the administrative action.


Categories

Enforcement Actions, Investment Advisers