SEC Files Action Against Investment Adviser to Enforce Compliance with Order to Pay Disgorgement of Misappropriated Investor Funds, Interest and Civil Penalties
The Securities and Exchange Commission announced today that it filed an application in U.S. District Court for the Eastern District of New York against Anthony T. Vicidomine and North East Capital, LLC alleging that they violated an SEC Order requiring them to pay $346,132.04, consisting of $189,415 in disgorgement, $6,717.04 in prejudgment interest, and a $150,000 civil penalty. According to the application, Vicidomine and North East failed to make any payments by August 21, 2013, despite the SEC's Order and their consent to do so.
According to the SEC's August 16, 2013 order instituting a settled administrative proceeding, Vicidomine, the sole principal of North East Capital, LLC, an unregistered investment adviser, misappropriated $189,415 from the North East Capital Fund LP (the Fund), a pooled investment vehicle he managed, by charging the Fund unearned "incentive fees." Vicidomine disbursed the monies directly into his own personal account, to his other business ventures, and to North East to pay his personal expenses. Additionally, Vicidomine and North East made misrepresentations, both orally and in writing, concerning Vicidomine's own investment in the Fund and the policies and procedures Vicidomine and North East employed to minimize investors' risk of losses.
Based on the above, the SEC ordered Vicidomine and North East to cease and desist from committing or causing any violations and any future violations of Sections 5 and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Vicidomine and North East agreed to pay disgorgement of $189,415 plus prejudgment interest of $6,717.04 as well as a civil monetary penalty of $150,000 by August 21, 2013. They failed to make any payment.
The SEC's application seeks a district court order enforcing its August 16, 2013 Order requiring Vicidomine and North East to pay $346,132.04 in disgorgement, prejudgment interest and civil penalties.
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