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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20383 / December 5, 2007

SEC v. Marc A. Freedman, Civil Action No. 07-3263-DKC (D. Md.)

SEC Charges Marc A. Freedman With Defrauding Investment Advisory Clients

The Securities and Exchange Commission announced that today it filed securities fraud charges in the United States District Court for the District of Maryland against Marc A. Freedman of Gaithersburg, Maryland. Freedman was the President, Chief Compliance Officer and part-owner of TriCapital Advisors, Inc. ("TriCapital"), an investment adviser registered with the Commission and located in North Bethesda, Maryland. Without admitting or denying the allegations of the Complaint, Freedman has consented to the entry of a final judgment permanently enjoining him from engaging in the violations set forth below. Freedman has also agreed to an Order by the Commission barring him from association with any investment adviser.

The Commission's Complaint alleges that, between 1999 and June 2005, Freedman misappropriated approximately $2.38 million from three TriCapital clients, falsely representing to the clients that the funds had been invested for them, or had been used to pay investment advisory fees owed to TriCapital. In order to conduct and conceal his fraud, Freedman created and distributed to clients false account statements and other documents, and made additional untrue statements in correspondence and in conversations with these clients. The Complaint alleges that Freedman transferred the stolen client funds to brokerage or bank accounts he controlled. He then used the stolen funds to repay two TriCapital clients he had previously defrauded and for a variety of his own personal expenses and debts, including, among other things, vacations, cars, credit card bills, and his daughter's college expenses.

The Complaint alleges that Freedman violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and seeks the imposition of a permanent injunction.

There is a pending criminal proceeding against Freedman in the District of Maryland based on similar conduct.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/2007/lr20383.htm


Modified: 12/05/2007