SEC Accuses Atlanta Man of Misusing Over $1.2M in Investor Funds
In an enforcement action, the US Securities and Exchange Commission is accusing Timothy S. Batchelor of misusing over $1.2M in investor monies. The funds were supposed to go toward the development of a submarine vessel and to businesses involved in national security.
According to the regulator’s complaint, of the $2.4M that Batchelor raised from investors through the Specter Ventures Fund II, he improperly spent half of the money, including almost $250K to buy new cars and about $225K to cover student loans. He allegedly moved thousands of dollars in investor monies to his own relatives. Batchelor also is accused of trying to conceal his actions by faking a document that misrepresented unauthorized expenditures as a loan.
The SEC contends that when Batchelor raised money through the Specter Ventures Fund II, he was not registered with the Commission, which he should have been. Now, the SEC wants disgorgement, interest, penalties, and permanent injunctions against him.
Massachusetts-Based Portfolio Manager Held Liable for Over $1.95M of Disgorgement
Kevin J. Amell, who is accused of diverting at least $1.95M to his own brokerage account from a fund that he had trading authority over, must now pay back the money as disgorgement. Amell is accused of engaging in fraudulent matched-trades that he carried out in a way to allow him to make a profit at cost to the fund.
Amell allegedly did this by arranging in advance for the sale or purchase of call options between the fund’s brokerage accounts and his account at prices that would harm the fund. He is currently serving 18 months in prison after pleading guilty in a parallel criminal case.
Final Judgement Reached in REIT Fraud Case Against Former ARCP CFO Brian Block
A district court in New York has entered the final judgment in the SEC’s REIT fraud case against ex-American Realty Capital Properties (ARCP) CFO Brian S. Block. ARCP, a real estate investment trust (REIT), is now called VEREIT.
The Commission charged Block in 2016 with inflating the REIT’s performance by enhancing a crucial metric. When he was notified that an incorrect method had been applied when determining the adjusted funds from operations for the REIT’s first quarter financial results in 2014, Block doctored the adjusted funds from operations presentation right before submitting second quarter outcomes for ARCP. He purportedly did this so that it would look like the company had satisfied estimates for that time frame even though this was untrue.
Block and former ARCP chief accounting officer Lisa P. McAllister were both hit with SEC civil charges. They also were charged in criminal court. Block, who was convicted of fraud, was ordered to pay a $100K fine and serve 18 months in prison.
In the SEC’s case, Block is ordered to pay a $160K civil penalty, subject to full injunctive relief, and permanently barred from serving as an officer and director. He also is suspended from practicing or appearing in front of the regulator as an accountant.
SEC Obtains Final Judgment Against Portfolio Manager Charged with Matched Trades Scheme, SEC, February 14, 2018
SEC Obtains Final Judgment Against Former CFO of American Realty Capital Properties Inc., SEC, February 14, 2018
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AriseBank in Dallas is Accused of Alleged $600M ICO Offering Fraud, Stockbroker Fraud Blog, January 29, 2018
Ameriprise Ordered to Pay $8M Over F-Squared Alpha Sector Strategy Sales, Institutional Investor Securities Blog, December 8, 2017
Ex-Morgan Stanley Executive is Sentenced in Multimillion-Dollar Fraud That Targeted Widow, Stockbroker Fraud Blog, February 9, 2018