ST. LOUIS (CN) - The SEC said it obtained an emergency court order Wednesday freezing the assets of four money management firms run by Burton Douglas Morriss, who allegedly skimmed $9 million from his customers.
"The SEC alleges that Burton Douglas Morriss, the principal of these entities, misappropriated over $9 million of investor assets," the SEC said in a statement.
"Morriss, his two private investment funds, MIC VII LLC and Acartha Technology Partners LP, and his management firms, Gryphon Investments III LLC and Acartha Group LLC, raised at least $88 million from at least 97 investors to invest in preferred shares or membership interests in the defendant entities. The defendants represented to investors that the investment funds would invest in early to mid-stage companies in the financial services and technology sectors," the SEC said in its statement.
Morriss ran the companies since 2003, the SEC said.
"The SEC alleges that unbeknownst to investors, for the past several years, Morriss has misappropriated investor funds through transfers from his companies to himself and another entity he controlled, Morriss Holdings LLC, to pay for personal expenses, including, mortgage and alimony payments, payment of personal loans, pleasure trips, and household expenses. In an attempt to conceal his scheme, the fraudulent transfers that Morriss made to himself were recorded as 'loans' on the defendant entities' books. In fact, these transfers were never truly loans because Morriss did not intend to repay them at the time of his misappropriation."