U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23936 / September 19, 2017
Securities and Exchange Commission v. Francisco Illarramendi, et al., No. 3:11cv-78 (D. Conn. filed Jan. 14, 2011)
United States v. Illarramendi, No. 3:11-cr-0041 (D. Conn. filed Sept. 8, 2017).
SEC Obtains Final Judgment Against Entities Used to Perpetrate Multimillion Dollar Ponzi Scheme
The Securities and Exchange Commission has obtained a final judgment against eight entities that a former Connecticut-based fund manager whom the agency charged with perpetrating a years-long, multimillion dollar Ponzi scheme, used to defraud investors.
The judgment, entered on September 18, 2017 by the Honorable Janet Bond Arterton of the U.S. District Court for the District of Connecticut against all eight entities, permanently enjoins Highview Point Partners, LLC and Michael Kenwood Capital Management, LLC from violating sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and permanently enjoins Highview Point from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment, which the entities agreed to without admitting or denying the SEC’s allegations, does not order disgorgement or penalties against the entities based on the court-appointed receiver’s four distributions of recovered assets totaling over $330 million to defrauded investors and creditors. To date, the majority of claimants have received back 92% or 100% of their verified losses.
The court’s entry of judgment against the entities resolves this litigation in its entirety. The fund manager, Francisco Illarramendi, is serving a sentence of 13 years in federal prison after pleading guilty in a parallel criminal case. Earlier this year, following a grant of summary judgment on the SEC’s claims, Judge Arterton entered judgment against Illarramendi and ordered him to pay approximately $25.8 million in disgorgement and a $1 million penalty.
https://www.sec.gov/litigation/litreleases/2017/lr23936.htm