SEC Charges New York Firm Concord Management and Owner with Acting as Unregistered Investment Advisers
Firm and Owner’s failures to register more than $7 billion in assets to former Russian Official
The Securities and Exchange Commission (SEC) has announced charges against Concord Management LLC and its owner, Michael Matlin, for operating as unregistered investment advisers. Here's a summary of the key points from the announcement:
1. Concord Management LLC, based in Tarrytown, New York, and its owner, Michael Matlin, were charged by the SEC for acting as unregistered investment advisers.
2. Their only client was a wealthy former Russian official who was widely believed to have political connections to the Russian Federation.
3. Matlin established Concord in 1999 with the purpose of providing investment advice for compensation and managing the client's investments in U.S.-based private funds.
4. The SEC alleges that from at least 2012 until March 2022, Concord and Matlin facilitated and monitored hundreds of investments, collectively worth billions of dollars, in private equity funds and hedge funds on behalf of their client.
5. Concord and Matlin were required to register as investment advisers with the SEC based on their activities, but they failed to do so. This failure allowed them to avoid certain legal obligations that protect investors, including reporting requirements and SEC examinations.
6. As of January 2022, Concord and Matlin were managing an estimated total of $7.2 billion in 112 different private funds for their sole client.
7. In March 2022, the United Kingdom and the European Union designated Matlin and Concord's client as sanctioned individuals, resulting in the freezing of the client's assets.
8. The SEC's complaint alleges that in February 2022, Concord and Matlin assisted the client in redeeming investments and selling his securities portfolio.
9. Concord earned more than $80 million for providing investment advice to their billionaire client over a decade while failing to register as investment advisers.
10. The SEC contends that Concord's failure to register undermined the SEC's ability to effectively oversee the billions of dollars that the client invested in the United States. It also allowed Concord to evade important rules meant to prevent market abuse, including compliance policies and record-keeping requirements for investment advisers.
The charges brought by the SEC highlight the importance of complying with regulatory requirements in the financial industry to protect investors and maintain the integrity of the financial markets.
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