SEC hits Aequitas with charges

The Securities and Exchange Commission filed suit against Aequitas Capital Management, alleging the firm defrauded investors.

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The complaint filed in federal district court in Oregon claims CEO Robert Jesenik and Executive Vice President Brian Oliver knew as far back as July 2014 that the firm was using new investor money to pay redemptions and interest to prior investors in a “Ponzi-like fashion.” It noted that cash flow shortages at the firm continued “with increased severity” through 2015.

Yet while its condition worsened during this period, the firm continued to raise capital from investors, use a private jet and attend what the SEC described as “posh dinner and golf outings.” The complaint claims former CFO and chief operating officer N. Scott Gillis concealed the firm’s condition from investors and was also aware that Jesenik and Oliver were soliciting investors so that the firm could pay operating expenses and repay earlier investors.

(READ MORE: Portland Business Journal)

Last month, investment consultant Chris Bean said that Aequitas Capital Management hid the company’s financial instability from him and his clients.

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