ENFORCEMENT PROCEEDINGS - SEC Imposes Investment Adviser Bar Against William H. Eichengreen
PMHV | Quote | Chart | News | PowerRating -- On November 19, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions (Order) against William H. Eichengreen. The Order bars Eichengreen from associating with any investment adviser pursuant to Section 203(f) of the Advisers Act. The Commission brought the administrative proceeding against Eichengreen based on an injunction entered against him by the U.S. District Court for the Northern District of Illinois in SEC v. Eichengreen and Myatt, 08-cv-5564. Eichengreen consented to entry of the Order without admitting or denying the findings contained in the Order except as to jurisdiction and the fact that the District Court had entered a permanent injunction against him.
The Order finds that Eichengreen was the Chief Compliance and Marketing Officer for Directors Performance Fund, LLC (the Fund), a now-defunct hedge fund operated by Eichengreen and Sharon Vaughn through Vaughn's wholly-owned registered investment adviser, Directors Financial Group, Ltd. (DFG). On Sept. 29, 2008, the Commission sued Eichengreen, alleging that - in the course of DFG's investment in a purported FOREX trading program and its subsequent investment of $25 million of the Fund's assets in a fraudulent "Prime Bank" scheme - Eichengreen and DFG defrauded the Fund, and DFG's individual investor adviser clients who invested in the Fund, by (a) falsifying the Fund's financial statements, thereby allowing DFG to take profit-based fees to which it was not entitled, and (b) misrepresenting the Fund's trading strategy, investments, and performance. The Complaint also alleged that Eichengreen substantially assisted DFG in altering documents in anticipation of a Commission examination of DFG. On Oct. 29, 2009, the Court entered an order that, among other things, permanently enjoined Eichengreen from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and from aiding and abetting violations of Sections 204, 206(1), and 206(2) of the Advisers Act and Rule 204-2 thereunder. Eichengreen consented to entry of the injunction without admitting or denying any of the allegations in the Complaint. (Rel. IA-2952; File No. 3-13690)
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