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Matthias Knab, Opalesque: The Securities and Exchange Commission today filed charges against Jeffrey Arsenault of Greenwich, Connecticut and two investment advisers he controls, Old Greenwich Capital Advisors, LLC and OGCP Management Co, LLC. The SEC's complaint charges the defendants with conducting a fraudulent scheme to misappropriate at least $4.1 million from two private funds they advised and ultimately from the investors in those funds.
According to the SEC's complaint, filed in the United States District Court for the District of Connecticut, between October 2014 and the present, Arsenault and his co-defendants misappropriated the assets of two private funds the defendants advised and controlled to pay for Arsenault's personal expenses and to make unauthorized payments for the defendants' benefit. The complaint further alleges that, to conceal their misappropriation from investors, the defendants falsely overstated the value of the funds' investments in investor account statements and tax documents, including by falsely claiming that one of the private funds defendants controlled held substantial investments in the other private fund under their control even after the latter fund had ceased operating.
The SEC's complaint charges Arsenault, Old Greenwich Capital Advisors, LLC and OGCP Management Co, LLC with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder and Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The complaint seeks injunctive relief, disgorgement plus prejudgment interest, and civil monetary penalties from the defendants, and an officer and director bar against Arsenault.
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