U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21466 / March 29, 2010

SEC v. Brian Travis, et al., Civil Action No. 09-10073 (S.D.N.Y.)

SEC Settles Fraud Charges Against Two Employees of an Investment Adviser

The Securities and Exchange Commission announced today that on March 26, 2010, the Honorable P. Kevin Castel, United States District Judge for the Southern District of New York, entered final judgments against defendants Brian Travis and Nicholas Vulpis in SEC v. Brian Travis, et al., 09 CV 2288.

The Commission's complaint alleged that from March 2003 to October 2005, Travis and Vulpis, two employees of investment adviser JLF Asset Management LLC, solicited and accepted bribes from registered representatives of broker-dealers. The bribes took the form of payments for expensive travel, rent for a personal residence, and daily car service. In exchange for those bribes, Travis and Vulpis directed trades, and the resulting commissions, to those broker-dealers paying the bribes. Travis and Vulpis did not disclose these bribes or the material conflict of interest that they created to the investment adviser, defrauding the hedge funds that JLF advised.

In connection with the settlement, Travis consented, without admitting or denying the allegations in the Commission's complaint, to an order permanently enjoining him against future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, to pay disgorgement of $107,965, prejudgment interest of $35,029, and a penalty of $107,965.

In connection with the settlement, Vulpis consented, without admitting or denying the allegations in the Commission's complaint, to an order permanently enjoining him against future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, to pay disgorgement of $105,450, prejudgment interest of $32,381, and a penalty of $100,000.

For further information, see Litigation Release Nos. 20948 (Mar. 12, 2009) and 21390 (Jan. 22, 2010).

 
http://www.sec.gov/litigation/litreleases/2010/lr21466.htm

Last modified: 3/29/2010