U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20924 / March 4, 2009
Securities and Exchange Commission v. James M. Nicholson, et. al., United States District Court for the Southern District of New York, Civil Action No. 09 CV 1748 (RMB)
Information for Customers of James M. Nicholson and Westgate Capital Management, LLC
On February 25, 2009, the United States District Court for the Southern District of New York granted the Securities and Exchange Commission’s emergency application for an order freezing the assets of Westgate Capital Management, LLC (“Westgate”) and its managing member, James M. Nicholson (“Nicholson”). See Securities and Exchange Commission v. James M. Nicholson, et al., Action No. 09-civ-1748 (SDNY).
The SEC's complaint alleges that Nicholson and Westgate defrauded current and prospective investors in eleven hedge funds they managed by misrepresenting the value of the hedge funds to investors and soliciting new investors with sales materials that claimed a nearly impossible record of investment success.
On March 3, 2009, the court extended its preliminary asset freeze through trial in this matter, and entered a preliminary injunction by consent as to Defendants Nicholson and Westgate enjoining them from violating Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940; Section 17(a) of the Securities Act of 1933; and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
In addition, the court entered an order appointing a receiver for the estates of Nicholson, Westgate and the following Relief Defendants: Westgate Absolute Return Fund, LP; Westgate Alpha Fund, LP; Westgate Equity Fund, LP; Westgate Focus Fund, LP; Westgate Growth Fund, LP; Westgate Opportunity Fund, LP; Westgate Opportunity Master Fund, Ltd.; Westgate Premier Growth Fund, LP; Westgate Select Fund, LP; Westgate Strategic Growth Fund, LP; and Westgate Summit Fund, LP.
The court appointed Lee S. Richards, Esq. as receiver with full powers to, among other things: determine the nature, location and value of all assets, take possession of all assets, and evaluate and determine claims of investors. For more information, investors should contact the receiver at (877) 788-2801. Additional information is available at www.westgatecapitalreceiver.com.
For additional information, see Litigation Release No. 20911.