The Securities and Exchange Commission today charged San Francisco-area investment adviser Cornerstone Capital Management, Inc. for misrepresenting the value of its clients’ investments in what turned out to be a series of Ponzi schemes.
In an order instituting administrative proceedings against the firm and its president, Laura J. Kent of Redwood City, the SEC’s Division of Enforcement alleges that, despite knowing that certain programs in which they had invested approximately $15 million of their clients’ funds turned out to be scams, Cornerstone and Kent continued to assure their clients that the investments retained their full value.
Even after the principals behind some of those investments were convicted of criminal fraud, Kent continued to charge an assets-under-management fee based on the original cost of the failed investments, collecting more than a half-million dollars in inflated fees from her clients.
No comments:
Post a Comment