SEC Office of the Inspector General Posts Memorandum of Inquiry Related to SEC’s Putnam Mutual Funds Market Timing Investigation

January 7, 2010

The SEC filed a civil injunctive action against Charles R. Kokesh for his role in defrauding at least 21,000 investors in four business development companies (BDCs) through a variety of schemes and contrivances. 

The SEC alleges that from at least 1995 through July 2007, Kokesh controlled two now-defunct SEC-registered investment-adviser firms that advised the BDCs. The SEC also alleges that Kokesh misappropriated approximately $45 million of investor funds by causing the BDCs to pay illegal distributions, performance fees, and expense reimbursements to the advisers. The SEC stated that to conceal the scheme, Kokesh caused the Advisers to distribute misleading proxy statements to BDC investors and to file false SEC reports on behalf of the BDCs.

Click to access the release.


Enforcement Actions, Mutual Funds