SEC Names Starr’s Accomplice in Money Fraud, Files Lawsuit

Jack Humphrey, Regulatory journalist
December 16, 2010 /

Nearly seven months after Manhattan-based financial advisor Kenneth Ira Starr was charged with money fraud by the Securities and Exchange Commission (SEC), SEC has identified his former lawyer Jonathan Star Bristol to be accountable for the crime when he tolerated Starr to use his attorney trust accounts for the stolen money, “aiding and abetting” the fraud.

The SEC stated in its lawsuit filed May 27, 2010 that Starr, with the two bodies – Starr Investment Advisors LLC and Starr & Company LLC – under his control, have illegally transferred money from his advisory clients to his account, which he used personally.

Now the SEC has filed another related lawsuit indicting Jonathan Star Bristol for helping Starr making illegal and clandestine money transfers from his clients to Bristol’s account starting November 2008 until May 2010, which he would later transfer to Star and his two companies without the clients’ knowledge, the amount of which have reached $25 million.

The international law firm where Bristol worked during the course of the money fraud was not aware of his transactions in which the sums of money transferred to his account from Starr’s clients were sent directly to his home.

The amended complaint filed by SEC cited Bristol’s confrontation with one of Starr’s victims. According to SEC, the lawyer told the victim that the money worth $1 million was being “bundled with other clients’ funds for an investment with UBS Financial Services,” which he actually used to settle with one of Starr’s former clients.

Bristol even tried to obstruct SEC’s investigation into the money fraud committed by Starr by offering the client representations, violating “the ethical obligations of lawyers,” the SEC added.

The commission would disgorge Bristol of his ill-gotten gains from his participation of the money fraud, with prejudgment interest and additional fines, in addition to barring him from exercising his profession before the SEC.

 

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