{"id":85517,"date":"2023-08-08T00:46:31","date_gmt":"2023-08-08T04:46:31","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=85517"},"modified":"2023-08-08T00:36:41","modified_gmt":"2023-08-08T04:36:41","slug":"fund-administrator-charged-for-missing-red-flags","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/08\/2023\/fund-administrator-charged-for-missing-red-flags.html","title":{"rendered":"Fund Administrator Charged For Missing Red Flags"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has settled charges against <strong>Theorem Fund Services LLC (TFS)<\/strong>, a fund administrator based in Boca Raton, Florida, for failing to respond to red flags relating to a fraud against a private fund and its investors.<\/p>\n\n\n\n<p>According to the SEC\u2019s order, TFS provided administration services to a fund managed by <strong>EIA All Weather Alpha Fund Partners<\/strong> and Andrew M. Middlebrooks, both of whom <a href=\"https:\/\/www.sec.gov\/news\/press-release\/2022-90\">the SEC charged in May 2022<\/a> with fraud for allegedly engaging in a scheme that included the misappropriation and misuse of investors\u2019 funds over a five-year period. According to the order, during TFS\u2019s engagement, the fund suffered significant losses as a result of trading by EIA and Middlebrooks; however, TFS, at the direction of EIA and Middlebrooks, calculated the Net Asset Value, which did not recognize the losses, and sent investors account statements that materially overstated the value of their investments.<\/p>\n\n\n\n<p><strong><em>\u201cFund administrators are important gatekeepers in the private fund space,\u201d said Andrew Dean, Co-Chief of the SEC Enforcement Division\u2019s Asset Management Unit. \u201cHere, TFS failed to live up to its gatekeeper responsibilities and distributed inaccurate account statements to investors despite clear red flags.\u201d&nbsp;&nbsp;&nbsp;<\/em><\/strong><\/p>\n\n\n\n<p>The SEC\u2019s order finds that TFS was a cause of certain of EIA\u2019s and Middlebrooks\u2019 violations of the Securities Act of 1933 and of the Investment Advisers Act of 1940 and Rule 206(4)-8(a)(1) thereunder. TFS agreed, without admitting or denying the SEC\u2019s findings, to a cease-and-desist order and to pay a civil penalty of <strong>$100,000<\/strong>. In addition, TFS agreed to pay disgorgement of $18,000 and prejudgment interest of $4,271.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has settled charges against Theorem Fund Services LLC (TFS), a fund administrator based in Boca Raton, Florida, for failing to respond to red flags relating to a fraud against a private fund and its [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-85517","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/85517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=85517"}],"version-history":[{"count":2,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/85517\/revisions"}],"predecessor-version":[{"id":85529,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/85517\/revisions\/85529"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=85517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=85517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=85517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}