FROM: U.S. DEPARTMENT OF LABOR
US Labor Department lawsuit results in court order to return more than
$225,000 in retirement assets to Milwaukee company’s workers
Trustee ordered to restore funds to Losik Engineering Design Group employee benefit plan
MILWAUKEE – A federal court in Milwaukee has ordered Michael J. Losik to restore $225, 274 to the Losik Engineering Design Group Ltd. defined benefit retirement plan. Losik, the company’s president and owner, violated the Employee Retirement Income Security Act by imprudently investing plan assets in a hedge fund, by making an improper distribution to his own account, and by failing to properly administer the plan. The judgment resolves a lawsuit filed by the U.S. Department of Labor based on findings of an investigation by the department’s Employee Benefits Security Administration.
"The department is committed to holding accountable those who are entrusted with the assets of workers’ retirement plans," said Steve Haugen, director of EBSA’s Chicago Regional Office, which conducted the investigation. "We will continue to help workers obtain their rightful benefits when plan fiduciaries violate the law."
Under the terms of the consent order and judgment, Losik is liable to the plan for $225, 274—the amount he distributed to himself in 2008. He is barred from serving as a fiduciary or service provider to any employee benefit plan subject to ERISA in the future.
Additionally, the court appointed an independent fiduciary to liquidate the plan’s approximate $250,000 investment in a high-risk hedge fund that Losik authorized in 2007 and which now represents 100 percent of the plan’s assets. The independent fiduciary will also terminate the plan and distribute the assets to the 20 qualified participants. The plan allegedly has not been administered since October 2009. The company ceased operations on or before April 2011.
The case was litigated by the department’s Regional Office of the Solicitor in Chicago.
Showing posts with label HEDGE FUND. Show all posts
Showing posts with label HEDGE FUND. Show all posts
Friday, June 21, 2013
Monday, January 14, 2013
HEDGE FUND MANAGER AND COMPANY PAY FINE FOR "...PATTERN OF DECEPTIVE CONDUCT..."
FROM: U.S. SECRUITIES AND EXCHANGE COMMISSION
Court Orders New York-Based Hedge Fund Manager and Firm to Pay Nearly $5 Million in Disgorgement and Penalties
The Securities and Exchange Commission announced today that, on January 3, 2013, Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York entered final judgments against hedge fund manager Chetan Kapur and his firm, ThinkStrategy Capital Management (ThinkStrategy), ordering them to jointly and severally pay disgorgement of $3,988,196.59 and civil penalties in the amount of $1,000,000.
The final judgments stem from a partially-settled civil injunctive action filed by the Commission on November 10, 2011. The SEC’s complaint alleged that over nearly seven years, Kapur and ThinkStrategy engaged in a pattern of deceptive conduct designed to bolster their track record, size, and credentials. In particular, Kapur and ThinkStrategy materially overstated the performance of their ThinkStrategy Capital Fund, giving investors the false impression that the fund’s returns were consistently positive and minimally volatile. The complaint also alleged that Kapur and ThinkStrategy repeatedly inflated the firm’s assets, exaggerated the firm’s longevity and performance history, and misrepresented the size and credentials of ThinkStrategy’s management team.
With respect to a second hedge fund they managed, the TS Multi-Strategy Fund, the complaint alleged that Kapur and ThinkStrategy misstated the scope and quality of due diligence checks on certain managers and funds selected for inclusion in the fund-of-funds’ portfolio. As a result, the TS Multi-Strategy Fund made investments in certain hedge funds that were later revealed to be Ponzi schemes or other serious frauds, including Bayou Superfund, Valhalla/Victory Funds, and Finvest Primer Fund.
The Commission charged Kapur and ThinkStrategy with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Without admitting or denying the allegations in the Commission’s complaint, Kapur and ThinkStrategy consented to the entry of November 18, 2011 judgments permanently enjoining them from violating the above provisions. Kapur also consented to a November 30, 2011 SEC order permanently barring him from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
Court Orders New York-Based Hedge Fund Manager and Firm to Pay Nearly $5 Million in Disgorgement and Penalties
The Securities and Exchange Commission announced today that, on January 3, 2013, Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York entered final judgments against hedge fund manager Chetan Kapur and his firm, ThinkStrategy Capital Management (ThinkStrategy), ordering them to jointly and severally pay disgorgement of $3,988,196.59 and civil penalties in the amount of $1,000,000.
The final judgments stem from a partially-settled civil injunctive action filed by the Commission on November 10, 2011. The SEC’s complaint alleged that over nearly seven years, Kapur and ThinkStrategy engaged in a pattern of deceptive conduct designed to bolster their track record, size, and credentials. In particular, Kapur and ThinkStrategy materially overstated the performance of their ThinkStrategy Capital Fund, giving investors the false impression that the fund’s returns were consistently positive and minimally volatile. The complaint also alleged that Kapur and ThinkStrategy repeatedly inflated the firm’s assets, exaggerated the firm’s longevity and performance history, and misrepresented the size and credentials of ThinkStrategy’s management team.
With respect to a second hedge fund they managed, the TS Multi-Strategy Fund, the complaint alleged that Kapur and ThinkStrategy misstated the scope and quality of due diligence checks on certain managers and funds selected for inclusion in the fund-of-funds’ portfolio. As a result, the TS Multi-Strategy Fund made investments in certain hedge funds that were later revealed to be Ponzi schemes or other serious frauds, including Bayou Superfund, Valhalla/Victory Funds, and Finvest Primer Fund.
The Commission charged Kapur and ThinkStrategy with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Without admitting or denying the allegations in the Commission’s complaint, Kapur and ThinkStrategy consented to the entry of November 18, 2011 judgments permanently enjoining them from violating the above provisions. Kapur also consented to a November 30, 2011 SEC order permanently barring him from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
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