Securities Law Prof Blog

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

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Tuesday, October 5, 2010

SEC Charges New Jersey Adviser with Misappropriating Pension Accounts

The SEC filed an emergency enforcement action in the federal district court in New Jesey to halt a fraudulent scheme by investment adviser Carlo G. Chiaese and his company, C.G.C. Advisors, LLC. The Commission also charged Chiaese's wife, Micol Chiaese, as a relief defendant for her unjust enrichment from the scheme.  According to the SEC's complaint, between 2008 and the present, Chiaese and CGC misappropriated at least approximately $2.5 million from at least six of their advisory clients, including a union pension trust fund for the benefit of approximately 880 members. He used much of his clients' funds to support his lavish lifestyle. 

The Commission is seeking, among other emergency relief, a temporary restraining order, which freezes the assets of Chiaese, Micol Chiaese and CGC. In its enforcement action, the Commission is seeking additional relief, including orders enjoining Chiaese and CGC, preliminarily and permanently, from committing future violations of the foregoing federal securities laws, and a final judgment ordering Chiaese, Micol Chiaese and CGC to disgorge their ill-gotten gains plus prejudgment interest, and assessing civil penalties against Chiaese and CGC.

http://lawprofessors.typepad.com/securities/2010/10/sec-charges-new-jersey-adviser-with-misappropriating-pension-accounts.html

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