SEC Ices Alleged PIPEs Scheme

Mar 27 2009 | 12:05pm ET

The Securities and Exchange Commission this week obtained emergency relief against The Nutmeg Group and its principals Randall and David Goulding. The regulator alleges that the father and son team, which controls and advises 15 investment funds, for misappropriating investor assets and failing to keep required books and records.

According to the complaint, Nutmeg has invested fund assets almost exclusively in private investments in public equity transactions. As the general partner and/or investment adviser for each of the Funds, Nutmeg claims to have assets under management of at least $32 million.

However, Nutmeg and the Gouldings allegedly misappropriated over $4 million in client assets by transferring them to third parties. The complaint further alleges that Nutmeg did not fully document the funds' investments, improperly commingled fund assets, and cannot value the Funds' holdings.

As a result, net asset and other investment values have been incorrectly reported to investors. Nutmeg has also failed to keep required books and records, and to keep assets with qualified custodians, which has further put client funds at risk, according to the SEC.

Randall Goulding was also convicted in 1992 of a felony in connection with a tax evasion and money laundering scheme.

In addition to the emergency relief already obtained, the SEC is seeking preliminary and permanent injunctions and disgorgement against all defendants, and civil penalties against Nutmeg and Randall Goulding.


In Depth

Humble in Hofstra...One Debate an Election Can Make

Sep 26 2016 | 10:20am ET

Tonight's U.S. Presidential debate, infamously coined the “Humbling in Hofstra...

Lifestyle

Vortic: Reimagining the Custom Wristwatch

Sep 27 2016 | 7:24pm ET

American watch manufacturer Vortic, which started out restoring antique pocket watch...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...