Wednesday, September 30, 2009

Misappropriating Money

Just when I start to think the material related to the Series 65/66 exam is boring, I find a headline such as the following to snap me out of my funk:

SEC Charges Illinois Money Manager with Misappropriating Investor Assets . . .

Of course, you have to love the word "misappropriating" in place of "stealing," but regulators are lawyers, and this is how they communicate. As a resident of big, scary Chicagoland, it is nice to see that some shenanigans take place downstate. As you'll see from the announcement at this investment adviser (money manager) apparently made some false claims to investors (fraud) and used investor deposits to enjoy a high-rolling lifestyle (misappropriating/stealing).

Notice how the SEC is doing whatever they can in this case, "seeking injunctive relief, disgorgement, prejudgment interest, civil penalties and the appointment of a receiver." So, they wanted a federal judge to issue an injunction, and this is what they got for the asking: The Honorable Ruben Castillo, U.S. District Court Judge for the Northern District of Illinois, granted the SEC's request for emergency relief, including an order permanently enjoining Huber and Hubadex from committing further violations of the antifraud provisions and an order freezing the assets of Huber, Hubadex and the relief defendants. Huber, Hubadex and the relief defendants agreed to the emergency relief requested by the SEC.

So, at this point, it's a civil matter. But, the US Attorney's office can also pursue these matters in criminal court--I mean millions of dollars are involved.

In any case, read the announcement yourself. If you still think the Series 65/66 material on regulatory issues and business practices is "irrelevant," go ahead and post your comment below.

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