Monday, 26 January 2015
Last updated 3 hours ago
Aug 22 2011 | 2:00pm ET
The SEC has charged Philadelphia-based Benchmark Asset Managers with the misappropriation of about $8.7 million from clients.
The defendants—which include Benchmark, its principal owner and its parent companies—have neither admitted nor denied the SEC allegations but have agreed to pay disgorgement of $8,706,620 plus interest of $1,454,177, and a civil penalty of $150,000 by principal Sam Otto Folin and $750,000 each by the two entities.
Benchmark has also agreed to the entry of an injunction from future violations of the fraud provisions under the Securities Act of 1933, the Exchange Act of 1934, and the Investment Advisers Act of 1940 and Folin also agreed to the issuance of an order by the SEC barring him from association with, among others, an investment adviser. Benchmark agreed to an order revoking its investment adviser registration.
According to the legal web site Lexology, the SEC complaint alleges that Benchmark, through Folin, sold securities over an eight-year period ending in 2010 in Benchmark and Safe Haven Portfolios, a privately offered hedge fund, promising investors the fund would invest in “socially responsible” securities. Instead, according to the SEC, the funds were used, in part, to pay previous investors and some of Benchmark’s expenses (including Folin’s salary).
The SEC also alleges that Benchmark made loans to its parent company and that those loans were used to fund other loans between affiliated entities—something not disclosed to investors. The agency also says Benchmark and Folin failed to disclose to the advisory clients the fact that Benchmark was under extreme financial distress.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…