WASHINGTON (CN) – Two top executives at Quantek Asset Management will pay $3.1 million to settle SEC charges that they lied to investors that Quantek managers had invested in the $1 billion “opportunity fund” they were pushing, the SEC said.
The SEC issued a cease-and-desist order against Quantek Asset Management, Bulltick Capital Markets Holding, Javier Guerra and Ralph Patino. Bulltick was Quantek’s former corporate parent.
“Fund investors frequently inquire about the extent of the manager’s personal investment during their due diligence process, and many require it in fund selection,” the SEC said in a statement announcing the settlement. “Quantek, particularly Patino, misrepresented to investors from 2006 to 2008 that management had skin in the game. These misstatements were made when responding to specific questions posed in due diligence questionnaires that were used to market the funds to new investors. Quantek made similar misrepresentations in side letter agreements executed by Guerra with two sought-after institutional investors.”
Quantek and Guerra together will disgorge $2.2 million and pay fines of $375,000 (Quantek) and $150,000, the SEC said.
Bulltick will pay $300,000 and Patino $50,000.
Guerra and Patino also promised the SEC not to do it again.