N.Y.-Based Investment Advisory Firm Settles SEC Fraud Charges

Jack Humphrey, Regulatory journalist
September 10, 2012 /

The US Securities and Exchange Commission announced that New York-based investment advisory firm ICP Asset Management and its founder and president Thomas C. Priore have agreed to settle the agency’s charges that they defrauded several collateralized debt obligations (CDOs) they managed.

ICP, Priore, and related entities have agreed to a final judgment ordering them to pay more than $23 million to settle the case the SEC filed against them in June 2010 in federal court in Manhattan. The SEC alleged they engaged in fraudulent practices and misrepresentations that caused the CDOs to overpay for securities and lose millions of dollars.

Priore and the ICP companies also improperly obtained fees and undisclosed profits at the expense of the CDOs and their investors.

“The settlement with Priore and ICP sends a clear message that investment advisers must always act in the best interests of their advisory clients, even if those clients are sophisticated investors,” said George S. Canellos, Deputy Director of the SEC’s Division of Enforcement. “When advisers put their own interests ahead of their clients’ interests, the SEC will seek to hold them accountable.”

The court approved the settlement terms on September 6. The final judgment orders Priore to pay disgorgement of $797,337, prejudgment interest of $215,045, and a penalty of $487,618. ICP and its holding company Institutional Credit Partners LLC are ordered, on a joint and several basis, to pay disgorgement of $13,916,005 and prejudgment interest of $3,709,028.

ICP also is ordered to pay a penalty of $650,000. An affiliated broker-dealer ICP Securities LLC is ordered to pay disgorgement of $1,637,581, prejudgment interest of $301,893, and a penalty of $1,939,474. Priore also agreed to settle an administrative proceeding against him and be barred from association with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent, and from participating in any offering of a penny stock. He has a right to reapply for association or participation after a period of five years.

 

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