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

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR