SEC secures asset freeze in suspected kickback case

26 May 2009

US market regulator the Securities and Exchange Commission (SEC) has secured an emergency asset freeze against a Wisconsin-based investment adviser accused of taking part in a kickback scheme and other fraudulent activities involving six unregistered investment pools under its management.

The SEC's complaint contests that the founder, majority shareholder and chief executive of Wealth Management James Putman and the firm's former president and chief investment officer Simone Fevola accepted undisclosed payments of $1.24 million that derived from investments made by the pools in 2006 and 2007.

Furthermore, Mr Putman, Mr Fevola and Wealth Management are accused of misrepresenting the stability and risk profile of the two biggest investment pools and of placing clients into their investments, despite them not meeting clients' objectives.

The assets of Wealth Management and all six investment pools have been frozen and a receiver will take over their operation, the SEC said.

Wealth Management claims it has approximately $102 million in client funds invested in the pools.

Merri Jo Gillette of the SEC's Chicago office said: "As we allege in our complaint, Putman and Fevola put their own financial greed ahead of the safety and stability of their clients' investments."

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development