Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, May 28, 2010

SEC Charges Famous NYC Adviser with Stealing Clients' Money

The SEC charged Manhattan-based financial advisor Kenneth Ira Starr (whom the press identifies as a financial adviser to the stars) with fraud and is seeking an emergency court order to freeze his assets after he stole client money for his personal use, including the purchase last month of a multi-million dollar apartment where he and his wife now reside. According to the SEC’s complaint, filed in federal court in Manhattan, Starr and his companies transferred $7 million from the accounts of three clients between April 13 and April 16, 2010, without any authorization. The transferred funds were ultimately used to purchase a $7.6 million apartment on the Upper East Side in Manhattan on April 16.

The New York Times provides additional interesting details, including the fact that Andrew Stein, former New York City Council president, was arrested in connection with the case.  Starr allegedly used misappropriated funds to help support Stein's "extravagant personal expenses;" the feds say Stein did not know about the fraud, but was arrested on tax charges.  NYTimes, Adviser to Stars Named in Fraud

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