Legal

Florida Investment Advisor Charged By SEC For Diverting Client Funds

Eliane Chavagnon Reporter 13 November 2012

Florida Investment Advisor Charged By SEC For Diverting Client Funds

The Securities and Exchange Commission has charged a Miami, FL-based investment advisor for concealing trading losses and diverting investor funds for personal use.

According to the SEC's complaint, Anand Sekaran and his firm Wasson Capital Advisors fabricated documents showing "illusory profits" after his trading strategy became unprofitable in 2008, causing substantial client losses.

Sekaran then used client funds to pay for numerous personal and business expenses, collecting fees in excess of what he was due under prior client arrangements.

"He inflated account balances on some clients’ account statements, using the letterhead of a defunct British Virgin Islands trust company for one client and the letterhead of a New Zealand firm for another client," the SEC said in a statement. "He misappropriated investor money for personal mortgage and maintenance payments, restaurant and travel expenses, entertainment and event tickets, employee salaries and health insurance, and rent and office expenses."

Sekaran and his firm agreed to resolve the SEC’s charges, as well as a criminal action from the US Attorney’s Office for the Southern District of New York.

In settling the SEC’s charges, Sekaran and Wasson consented to a final judgment imposing permanent injunctions from future violations of anti-fraud provisions related to the federal securities laws. Sekaran also consented to an SEC order barring him from the securities and penny stock industries. The authority said he is required to pay $2.3 million to satisfy restitution and forfeiture orders in the criminal matter.

The complaint was filed in US District Court for the Southern District of New York.

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