The Securities and Exchange Commission (SEC) charged investment advisers Kronus Financial Corporation and Finser International Corporation, along with their principal, Andrew H. Jacobus, with misappropriating over $17 million from 40 advisory clients, most of whom are Venezuelan nationals and include Catholic dioceses and elderly individuals.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, charges Kronus, Finser, and Jacobus with violating the anti-fraud provisions of Section 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) and 206(2) of the Investment Advisers Act of 1940.
The complaint alleges that Jacobus, through Kronus and Finser, as their sole owner, president, and director, offered and sold limited partnership interests in the Corfiser SIMI Fund, a company he controlled, which invested in IPOs. Per the SEC’s allegations, he abused his position of trust, based on his fiduciary duty as an investment adviser to several Clients, by duping them into depositing approximately $39.7 million into various bank and brokerage accounts which he controlled. He misrepresented: (1) that their money would be invested in that fund, (2) the legitimacy of, and returns on, their investments, (3) access to their money, and (4) the nature and balance of their investments, including by sending periodic account statements that contained fictitious holdings and balances, the SEC contends.
The SEC in its enforcement action also asserts that he misappropriated over $17.3 million of client funds to make payments to unrelated entities and individuals, and to pay for, among other things, Jacobus’s mortgage, property taxes, real estate purchases, travel, and luxury vehicles. He also made approximately $7.8 million in Ponzi-like payments to certain advisory clients, per the SEC’s court filings.
The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against the defendants. The SEC also seeks a conduct-based injunction against Jacobus. He was charged in Broward County, Florida, with one count of first-degree grand theft and has pleaded not guilty.
SEC Investment Fraud Lawyer David Chase
Nationally known SEC defense attorney David Chase, of the Law Firm of David R. Chase, has successfully represented individuals in SEC enforcement investigations around the country for over 25 years after having investigated and prosecuted securities fraud cases in the SEC’s Enforcement Division in the position of Senior Counsel. If you are under SEC investigation, or just received an SEC subpoena and are seeking experienced legal counsel, contact David at: 800-760-0912 or e-mail him at: david@davidchaselaw.com. Visit the Firm’s website for content on David’s national SEC defense practice and to review the firm’s prior successful results at: www.securitiesfrauddefense.net.
