|
U.S. SECURITIES AND EXCHANGE COMMISSIONLitigation Release No. 19211 / May 2, 2005Securities and Exchange Commission v. Vincent Montagna and Christine Palmer, 05 Civ. 4303 (KW)(S.D.N.Y.)SEC CHARGES HEDGE FUND MANAGER WITH SECURITIES FRAUDOn May 2, 2005, the Commission filed a civil injunctive action in United States District Court for the Southern District of New York, charging Vincent Montagna, president of Quantus Holding Company, Inc. ("Quantus"), an unregistered investment adviser, with securities fraud., and naming his wife, Christine Palmer, as a relief defendant On the same day, the United States Attorney's Office for the Southern District of New York announced the unsealing of an indictment against Montagna concerning some of the same conduct alleged in the Commission's complaint. The Complaint alleges that from at least August 2001 until at least August 5, 2002, Montagna defrauded investors and prospective investors in two hedge funds he managed through Quantus – Tiburon Asset Management LLC and Tiburon Partners, Ltd. (collectively the "Funds"). Montagna allegedly defrauded the investors and prospective investors by: repeatedly causing extremely positive – and false – performance claims to be disseminated to them; failing to disclose to investors the declining value and increased risk of Fund holdings; failing to disclose conflicts of interest he had with respect to certain investments; converting Fund income and assets for his own (or his wife's) benefit; and causing the Funds to make payments to him and his associates in excess of the amounts to which they were entitled. Specifically, the Complaint alleges, among other things, that:
The Complaint alleges that through this conduct, Montagna violated the antifraud provisions of the Securities, Exchange, and Investment Advisers Acts, more specifically Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In its complaint, the Commission seeks the following relief against Montagna: a permanent injunction, disgorgement plus prejudgment interest, and civil penalties . In addition, the Commission seeks disgorgement plus prejudgment interest from Palmer, whom the Complaint names as a relief defendant. As alleged in the Complaint:
The Commission acknowledges the assistance of the United States Attorney's Office for the Southern District of New York and United States Postal Service in the investigation of this matter. http://www.sec.gov/litigation/litreleases/lr19211.htm
|