Court Dismisses Appeal of Locke Capital Management Owner
The U.S. Court of Appeals for the First Circuit has dismissed the appeal of Leila C. Jenkins, the principal of Rhode Island-based investment adviser Locke Capital Management.
Jenkins had appealed a June 30, 2011 decision by a federal judge in the U.S. District Court for the District of Rhode Island. That decision granted the SEC’s motion for summary judgment and ruled against both Locke and Jenkins. The Court of Appeals dismissed Jenkins’ appeal upon her motion to withdraw it.
The complaint against Locke and Jenkins, filed in March 2009, alleged that they invented a billion-dollar client in order to gain credibility and attract legitimate investors.
The complaint further alleged that Jenkins tried to perpetuate her scheme by lying to the SEC staff about the existence of the invented client and furnishing the SEC’s staff with bogus documents in 2008, including fake custodial statements that she created on her laptop.
The U.S. District Court ordered that Locke and Jenkins were jointly and severally liable for disgorgement of $1,781,520, representing advisory fees paid to them from 2007-2009, plus prejudgment interest of $110,956. In addition, each defendant was ordered to pay a penalty of $1,781,520.
In February 2012, in separate administrative proceedings filed by the SEC against Jenkins and Locke, an administrative law judge issued Initial Decisions barring Jenkins from associating with any broker, dealer or investment adviser and barring Locke from acting as an investment adviser. Those Initial Decisions became final in March 2012.