Record supported Magistrate Judge’s judgment that defendant violated Investment Advisors Act, 15 USC sections 80(b)-1 to 80(b)-21, where defendant ran investment firm while failing to tell investors about his crimes in additional to violating many of Act’s technical rules. Record showed that defendant invested investors’ money in illiquid securities and overvalued fund’s investments and made excessive withdrawals of funds from commingled accounts. Defendant also failed to hire independent accountant and lawyer. While defendant disputed Magistrate Judge’s findings regarding value of certain assets, amount of restitution and amount of civil penalty, Judge’s findings were not clearly erroneous. However, Judge erred in imposing generic obey-the-law injunction, where Judge failed to specify what defendant must not do in future.
Federal 7th Circuit Court
Civil Court
Investment Advisors Act