The Securities and Exchange Commission has charged an Atlanta investment adviser and an entity he controls with defrauding a private fund they managed and its investors.
According to the complaint, Meyer withdrew most of the relinquished profits and used the funds to pay his living expenses. The complaint alleges that, to deceive investors, Meyer recorded on Arjun's books a receivable due from Statim. According to the complaint, Meyer claimed to pay down Statim's receivable, but did so by directly or indirectly borrowing money from the fund, therefore making the guarantees and No Loss Protection illusory because they were backed by nothing other than the receivable that sometimes grew to $2.9 million, or 11.5% of Arjun's net asset value.
The SEC's complaint alleges that Meyer and Statim violated the antifraud provisions 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 Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and that Meyer aided and abetted Statim's violations of these provisions. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
The SEC appreciates the assistance of the Securities and Charities Division of the Georgia Secretary of State's Office.