Harvest Managers, Benchmark Asset Managers, and Investment Advisor to Pay $11.6 Million to Settle SEC Charges Over Allegedly Mishandled Client Funds

Following SEC charges that they used material misrepresentations and omissions to misappropriate about $8.7 million from clients, family, and friends, Sam Otto Folin, Benchmark Asset Managers LLC and Harvest Managers, LLC have agreed to pay $11.6M in disgorgement, civil penalties, and prejudgment interests to settle the securities fraud allegations. By settling, however, they are not denying or admitting any misconduct.

The SEC claims that for about eight years (about ’02 – ’10) even though all three defendants sold securities in the two firms and in Safe Haven Portfolios LLC, with the promise to investors that money would go to private and public companies that possessed goals and intentions that were “socially responsible, part of these funds allegedly were diverted to pay past investors, Folin’s salary, and both firms’ expenses. Harvest and Benchmark also allegedly issued “notes” to friends, and family advisory clients that they said were safe and conservative, while promising guaranteed interest rates that were above market. They then misrepresented the notes’ value on statements.

The SEC also accuses Benchmark and Folin of forming Save Have in 2004 under the guise of offering investments to a number of portfolios. They had clients place their money in Safe Haven From ’06 – ’09. They also allegedly made Save Haven pay more than $1.7M to Harvest and Benchmark as supposed “development” expenses, which weren’t actually expenses related to Safe Haven (and were allegedly improperly amortized) and made the latter issue over $3.9 million in loans to the two investment advisory firms.

SEC Charges Philadelphia-Based Registered Investment Adviser With Fraud, Sec.gov, July 12, 2011
Recent Fraud Cases Show Investors Must Remain Vigilant, Forbes, July 13, 2011

More Blog Posts:

SEC to Up Dollar Thresholds for When an Investment Adviser Can Charge Investors Performance Fees, Stockbroker Fraud Blog, May 24, 2011
Investment Manager Accused of Securities Fraud Must Pay Defrauded Clients Over $20 Million, Stockbroker Fraud Blog, November 10, 2010
SEC Charges Investment Adviser With Allegedly Making Unsuitable Hedge Fund Recommendations to Elderly Clients, Stockbroker Fraud Blog, October 15, 2010
Securities fraud can result in huge financial losses for investors. An experienced stockbroker fraud law firm can help you recoup your losses.