The Securities and Exchange Commission says that the U.S. District Court for the District of Connecticut has approved a Fair Fund distribution that will give back $795,000 to the State of Connecticut Retirement and Trust Funds, which suffered financial losses because of an investment scam involving William A. DiBella, the former president of the Connecticut State Senate. The SEC’s 2004 complaint had accused DiBella and his consulting firm North Cove of taking part in an investment scheme with former Treasurer of the State of Connecticut Paul Silvester, who had invested $75 million in state pension funds with private equity firm Thayer Capital Partners.
The SEC claims that Silvester arranged for DiBella to receive a percentage of the investment from Thayer. Silvester is also accused of increasing the pension fund’s investment with Thayer by at least $25 million so that DiBella could receive a larger fee. In total, Thayer paid $374,500 to DiBella through North Cove.
A jury found DiBella liable for abetting and aiding in the securities fraud, and the trial court ordered him to pay $374,500 in disgorgement, $307,127 in prejudgment interest, and $110,000 in penalties. The SEC had to instigate contempt proceedings with the federal court because of DiBella’s continued nonpayment. He finally completed payment of over $795,000 in March 2010, and the SEC fair fund was then set up.
“When securities prices fall, fraud and other misdeeds are often exposed,” said Securities Fraud Lawyer William Shepherd. “Tens of thousands of public and private pension and other funds have recently experienced large losses. As in this case, the SEC and other securities regulators will frequently take on one or a few cases and force recovery, while clearing the way for others to go forward using private attorneys. Our stockbroker fraud law firm continues to represent both public and private fund managers seeking recovery of losses caused by the inappropriate acts and omissions of financial firms and their agents.”
Related Web Resources:
SEC Announces Distribution of DiBella Fair Fund to Connecticut Retirement and Trust Funds, CityBizListNY
Court Orders William DiBella, Former Majority Leader of the Connecticut State Senate, to Pay Over $791,000 in Connection with Fraud Relating to State Pension Fund, SEC, March 14, 2008