The Securities and Exchange Commission obtained an emergency court order and asset freeze preventing a former Colorado-based broker from further dissipating stolen client assets.
According to the SEC’s complaint, Sonya Camarco, a resident of Colorado Springs, Colorado, stole money over the course of 13 years from her clients’ accounts and then lied to her clients about the withdrawals.
The SEC alleges that Camarco appears to have forged client signatures on checks made out to C Investments, an entity Camarco used, and had the checks sent to a private post office box that she rented.
Camarco also allegedly liquidated securities in her clients’ accounts to make unauthorized payments to accounts she controlled. The complaint alleges that when confronted by clients, Camarco lied and told them that C Investments was an outside investment that she made on their behalf. The complaint alleges that when confronted by her employer, Camarco lied again, saying that she had no affiliation with C Investments and characterizing it as an outside investment held by one of her advisory clients. The SEC alleges that Camarco used the stolen client funds to pay her personal credit card bills and her mortgages.
The SEC also charged Camarco Investments Inc. and Camarco Living Trust as relief defendants based on their alleged receipt of stolen client funds.
The SEC’s complaint seeks disgorgement of allegedly ill-gotten gains plus interest from all the defendants and seeks a permanent injunction against and penalties from Camarco.
Hedge Fund Manager to Pay $4.6M for Inadequate Controls to Prevent Insider Trading
The SEC announced that hedge fund advisory firm Deerfield Management Company L.P. has agreed to pay more than $4.6 million to settle charges that it failed to establish, maintain and enforce policies and procedures reasonably designed to prevent the misuse of inside information, including information about confidential government decisions.
The case relates to insider trading charges that the SEC recently filed against current and former Deerfield analysts, a political intelligence analyst who passed them information, and an employee at the Centers for Medicare and Medicaid Services (CMS).
According to the SEC’s order, Deerfield conducted extensive research in the health care sector to help inform its investment decisions, and engaged research firms specializing in political intelligence about upcoming regulatory and legislative decisions. But Deerfield’s policies and procedures required only an initial review of the research firms’ own policies and procedures, and Deerfield otherwise placed the burden on its own employees to police themselves by identifying issues and informing supervisors.
The SEC’s order finds that Deerfield was on notice that the political intelligence analyst might be conveying material, nonpublic information. An email from the analyst said that he “heard from a reliable cms source” that CMS was about to issue a regulation, and an internal Deerfield email noted that the analyst “has a guy” at a “closed-door” government meeting. From at least May 2012 to November 2013, Deerfield generated more than $3.9 million in trading profits based on material, nonpublic information from the political intelligence analyst. Through its management agreements with the hedge funds, including performance-based compensation, Deerfield received approximately $714,110 due to these trades.
Without admitting or denying the findings, Deerfield consented to the SEC’s order. Deerfield is censured and required to pay disgorgement of $714,110 plus interest of $97,585 and pay a penalty of $3,946,267.