Thursday, November 15, 2012

SEC Charges Miami-Based Adviser with Hiding Trading Losses and Diverting Client Funds

In a complaint filed last week, the SEC charged a Miami-based investment adviser for defrauding his clients by concealing trading losses and diverting investor funds for personal use.

The SEC alleges that Anand Sekaran and his firm Wasson Capital Advisors Ltd. fabricated documents showing illusory profits after his trading strategy became unprofitable in 2008 and produced substantial losses for clients. The Commission also alleges that Sekaran also misused client funds to pay various personal and business expenses, and he collected fees in excess of what he was due under the arrangements he had with clients.

 According to the press release from the SEC, Sekaran and Wasson agreed to resolve the SEC’s charges as well as a parallel criminal action announced today by the U.S. Attorney’s Office for the Southern District of New York.

“An investment adviser’s fiduciary duty applies equally in good times and bad,” said Bruce Karpati, Chief of the SEC Enforcement Division’s Asset Management Unit. “Sekaran breached that duty when he concealed trading losses and misled clients rather than simply admitting that his investment strategy was unsuccessful.”

In settling the SEC’s charges, Sekaran and Wasson consented to a final judgment imposing permanent injunctions from future violations of the anti-fraud provisions of the federal securities laws. Sekaran separately consented to an SEC order barring him from the securities industry and penny stock industry. Sekaran is required to pay $2.3 million to satisfy restitution and forfeiture orders in the criminal matter.

For more details see the SEC's complaint and press release. If you believe you have been defrauded in a securities related matter, our attorneys, located in New York, New Jersey and Boca Raton, Florida, are available for a free consultation by phone. Email our office at info@beamlaw.com and we will connect you with the appropriate attorney. You can visit our web site - Securities Enforcement Attorneys and SECLaw.com - The Securities Law Home Page, for more information about our firm, and the securities laws in general.
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