The Securities and Exchange Commission on Thursday, May 27, charged Manhattan-based financial advisor Kenneth Ira Starr with fraud and is seeking an emergency court order to freeze his assets after he stole $7 million in client money for his personal use, the SEC said in a news release.
The charges include Starr’s alleged purchase last month through an entity called Colcave of a multimillion-dollar apartment where he and his wife, Diane Passage, now reside. The SEC’s complaint named Starr, Passage, and Colcave as defendants to recover client assets now in their possession. In addition to the emergency relief, the SEC’s complaint seeks payment of interest and financial penalties from the defendants.
“Starr breached his fiduciary duty as an investment adviser in the most egregious manner possible – he stole the funds his clients entrusted to him,” said George Canellos, director of the SEC’s New York Regional Office, in the release. “Starr betrayed the trust of some clients who have looked to him for years for investment advice and financial guidance.”
The SEC alleges that Starr and two companies he controls, Starr Investment Advisors and Starr & Co., violated securities laws pertaining to investment advisers and made unauthorized transfers of money in client accounts that ultimately wound up in Starr’s personal accounts.