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SEC charges Atlanta-based advisor with defrauding clients by Joseph Earnest September 20, 2012
Newscast Media ATLANTA, Ga—The Securities and Exchange Commission announced charges against a private fund manager and his Atlanta-based investment advisory firm for defrauding investors in a purported "fund-of-funds" and then trying to hide trading losses by creating new private funds to make money to pay back the original fund investors in Ponzi-like fashion. The SEC is seeking an emergency court order to freeze the assets of Angelo A. Alleca and Summit Wealth Management Inc. and prevent further investor losses, which are estimated to be $17 million among approximately 200 clients. "Alleca told Summit Wealth clients that he was investing their money in funds, but instead he was rolling the dice in the stock market without success," said Bruce Karpati, Chief of the SEC Enforcement Division's Asset Management Unit. "Rather than fess up about his trading losses, Alleca tried a cover up by creating new funds. Instead of winning back the money, he just compounded his fraud by suffering further losses." After receiving a tip, the SEC initiated an examination of Summit Wealth. As SEC examiners noticed something was amiss at the firm, they immediately coordinated with SEC enforcement attorneys to gather and assess evidence. "SEC examiners and attorneys acted swiftly after receiving a tip about possible wrongdoing at the firm, and have mounted an aggressive effort to put a stop to Alleca’s fraud before more investors are harmed," said William P. Hicks, Associate Director of the SEC's Atlanta Regional Office. According to the SEC’s complaint filed late yesterday in federal court in Atlanta, Alleca and Summit Wealth Management offered and sold interests in Summit Fund, which they told their clients was operating as a fund-of-funds – meaning they were investing their money in other funds and investment products rather than directly in stocks and other securities. Click here to read or download the entire lawsuit (pop-up). The SEC’s complaint charges Alleca, Summit Wealth Management, and the three funds with violations of the antifraud provisions of the federal securities laws. Add Comments>>
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