A federal court in New York entered a judgment against Andrew Scherr, the co-owner of Southport Lane Management, a now defunct New York-based private equity firm, according to the Securities and Exchange Commission.
According to the SEC’s complaint, from March 2013 to February 2014, Scherr acquired assets for Southport Lane that were worthless or overvalued. The complaint alleges that Scherr knew or should have known that Burns intended to and did sell the overvalued assets to the clients of his affiliated registered investment adviser, Southport Lane Advisors.
Without admitting or denying the allegations in the SEC’s complaint, Scherr consented to the entry of a judgment enjoining him from violating the antifraud provisions of the Investment Advisers Act of 1940.
The judgment provides that the amount of any disgorgement and civil monetary penalties to be imposed will be determined by the court at a later date.
SEC Obtains Judgment Against Penny Stock Promoter
The SEC obtained a judgment against a penny stock promoter in connection with multiple pump-and-dump schemes.
The complaint alleged that, as part of the manipulative scheme, Fung and the other defendants, through entities they controlled, acquired a significant amount of the publicly traded shares of the companies, distributed misleading newsletters to prospective investors touting the companies, and created demand for the stocks.
The complaint further alleged that the newsletters controlled by Fung, among other things, stated that they “may” or “might” sell the shares owned in the companies that were being touted when, in fact, they intended to sell, and in some cases were selling, the shares owned.
Fung consented to the entry of a judgment, which provides that the amount of any disgorgement and civil monetary penalties to be imposed will be determined by the court at a later date.