A U.S. fund manager agreed to pay US$1.59 million in a settlement with the U.S. Securities and Exchange Commission (SEC) for violating securities rules in an alleged Ponzi scheme.
The U.S. district court for the Central District of California entered a final judgment against fund manager Robert Newell, ordering him to disgorge US$668,300, to pay a penalty of US$668,300 and interest of US$254,067 to resolve the SEC’s civil enforcement action against him.
In its complaint against Newell and his firm, Black Hawk Funding, Inc., the SEC alleged that, between 2016 and 2019, they raised approximately US$37.7 million from investors through a series of private investment funds, ostensibly to invest in the cannabis industry.
However, the regulator alleged that investors’ money was used for other purposes, including for Ponzi-like payments to investors, and it alleged that Newell misappropriated approximately US$668,000 for his own benefit.
Last year, the court entered a consent judgment, imposing a permanent injunction on Newell, but it left the issue of monetary sanctions unresolved, until now.
Newell settled the case, without admitting or denying the SEC’s allegations.
Black Hawk Funding previously settled the allegations against it, also without admitting or denying the SEC’s allegations.