Friday, January 24, 2014

SEC Litigation Releases: Week in Review

Final Judgments Entered Against Former Hedge Fund Manager and His Company, January 23, 2014, (Litigation Release No. 22908)

Final judgments were entered against Berton M. Hochfeld and his "wholly-owned entity, Hochfeld Capital Management, L.L.C.," for allegedly "misappropriating assets and making material misstatements to investors in the Heppelwhite Fund L.P., a now defunct hedge fund." Previously, the court had ordered injunctions and an asset freeze, and granted "the Commission's motion to create a Fair Fund to compensate defrauded investors." The final judgments entered against the defendants this week enjoin them from future violations of the securities laws and order them to pay "disgorgement of $1,785,332, which will be deemed satisfied by the criminal forfeiture order entered against Hochfeld in a parallel criminal case." In the criminal case, United States v. Hochfeld, Hochfeld pled guilty to securities fraud and wire fraud and was sentenced to "a two-year prison term, which he is now serving, and pay forfeiture and restitution totaling approximately $2.9 million."

Subject of SEC Investigation Held in Contempt of Court and Arrested for Failing to Comply with Subpoenas, January 23, 2014, (Litigation Release No. 22907)

Anthony Coronati, the founder of, "has been held in contempt of court and arrested for failing to comply with subpoenas requiring him to produce documents and give testimony." Last November, the SEC filed a subpoena action against the defendant, because it is "investigating, among other things, whether Coronati commingled investor funds with other money in an account he controlled and used it to pay personal expenses." Coronati failed to appear for testimony or produce any documents despite being served two subpoenas in 2013. Coronati was found in civil contempt and ordered to pay $4,812 to the SEC to reimburse the costs of serving him the subpoenas. Additionally, "the U.S. Marshals Service arrested Coronati." At a hearing "the court ordered Coronati released on $50,000 bond and restricted his travel to the Southern and Eastern Districts of New York." A further hearing has been scheduled for February 6, 2014.

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