DALLAS (CN) – Former Dallas Cowboy Michel Kiselak used misrepresentations to raise $24 million for his company, Kiselak Capital Group, and threw 95% of the money into California-based Gemstar Capital Group, which falsified its performance too, the SEC claims in Federal Court.
Kiselak, of Westlake, Texas, lured investors by promising 2.25 percent monthly returns, and falsified documents he provided to shareholders, the SEC says.
Kiselak actually invested 95 percent of investor funds in Gemstar Capital Group, a private equity and venture capital fund, the SEC says. Gemstar and its president Jeffery Sykes, 51, of Redlands, Calif., are codefendants.
The SEC claims that Kiselak failed to disclose that a massive 35 percent performance fee would be levied on purported Gemstar profits. Also, the profits that were represented by Gemstar were false: falsified brokerage records showed $2.7 million in profit during the first quarter of 2009, amounting to a 9.6 percent return on investment.
But Gemstar’s actual brokerage records reflect a $20,000 gain on money market investments for the first quarter, amounting to a 0.09 percent gain, according to the complaint.
Kiselak, 42, played with the Cowboys fro 1998 to 2000. Kiselak “is not currently affiliated with a registered broker-dealer or investment adviser,” according to the complaint. “He currently holds a series 7 license that was termed in 2006, and has no known disciplinary history.”
The SEC says Sykes “does not hold any securities licenses.”