SEC Freezes Assets of Boston Firm

     BOSTON (CN) – The SEC has frozen the assets of Gregg Caplitz and Insight Onsite Strategic Management, accusing them of stealing from their clients, in Federal Court.
     The Boston-based defendants are “charged with stealing money from clients who were given the false impression they were investing in a hedge fund,” the SEC said in a statement.
     The complaint states: “This case involves an investment adviser’s theft of assets from his clients and others. On information and belief, the scheme described herein may have raised approximately $1,100,000 from at least twelve of Caplitz and IOSM’s advisory clients and others. Caplitz and IOSM employed a fraudulent scheme, and made and used false and misleading statements, in connection with the offer and sale of shares in a purported hedge fund named the Insight Onsite Strategic Fund, LP, (the ‘Insight Onsite Fund’) and/or the offer and sale of membership interests in Insight Onsite Strategic Partners, LLC (‘Insight Onsite Partners’), which was purportedly to serve as the general partner of the Insight Onsite Fund.”
     In its statement announcing the asset freeze, the SEC added: “Investor money was merely transferred to the firm’s chief investment officer and other members of her family who spent it on personal expenses. The firm reported in SEC filings that it has $100 million in assets under management, however the purported hedge fund actually has no assets.”
     Caplitz, 54, of Wilmington, Mass., is chief compliance officer of Insight Onsite.
     Also sued are Rosalind Herman, 57, of Las Vegas, Nev., chief investment officer of Insight Onsite; her son, Brian Herman, 34; another son, Brad Herman, 29; Brian Herman’s wife, Charlene Herman, 31, all of Las Vegas; and The Knew Finance Experts, of Las Vegas, of which all the Hermans are officers.
     “Caplitz and his firm conjured up a hedge fund to lure longtime clients into investing substantial amounts of money that became nothing more than a slush fund to pay bills for others,” Julie M. Riewe, deputy chief of the SEC Enforcement Division’s Asset Management Unit said in the statement.
     According to the SEC statement, it was a brazen operation: “Caplitz’s scheme began around 2009,” the SEC said in the statement, citing its own complaint. The statement continued: “While soliciting funds, Caplitz convinced one client and his wife to invest $275,000 in the hedge fund that Caplitz claimed would generate them about $1,000 per month in returns. Caplitz also solicited a 20-year client who after considering his sales pitch decided not to invest in the hedge fund because she considered it too risky of an investment for someone her age. But Caplitz apparently took action to obtain funds from the client’s IRA account and wire thousands of dollars to an Insight Onsite Strategic Management bank account. The client was not aware of the transfers and did not authorize them.”

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