Home News SEC Charges Founder of Bankrupt Advisory Firm with Fraud

SEC Charges Founder of Bankrupt Advisory Firm with Fraud

The Securities and Exchange Commission has charged a founder and managing principal of a New York-based investment adviser for misappropriating approximately $2.6 million from investors and then concealing part of the misappropriation through fraudulent accounting devices.

The Securities and Exchange Commission has charged a founder and managing principal of a New York-based investment adviser for misappropriating approximately $2.6 million from investors and then concealing part of the misappropriation through fraudulent accounting devices.

The SEC’s complaint alleges that beginning in at least 2013, Donald LaGuardia, Jr., a resident of Lavallette, New Jersey, who controlled the investment adviser, L-R Managers LLC, misappropriated investor money from private funds advised by L-R Managers.

According to the complaint, LaGuardia used the money to pay for personal and work-related expenses, including home renovations, salaries, and rent. The complaint also alleges that LaGuardia and L-R Managers used other accounting devices to inflate the capital account balances and returns reported to investors and made material misrepresentations about fund audits, expenses and performance. L-R Managers filed for bankruptcy in June 2017.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges LaGuardia with violating certain antifraud provisions of federal securities laws. The SEC is seeking permanent injunctions and financial penalties against LaGuardia, and the return of allegedly ill-gotten gains with prejudgment interest.

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