U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21533 / May 25, 2010
SECURITIES AND EXCHANGE COMMISSION v. CHRISTOPHER W. BASS, SWISS CAPITAL HARBOR-USA, LLC, SWISS CAPITAL HARBOR FUND A PARTNERS, L.P., SWISS CAPITAL HARBOR FUND B PARTNERS, L.P., AND SWISS CAPITAL HARBOR FUND C PARTNERS, L.P., Civil Action No. 10-CV-00606 (LEK) (DRH) (NDNY)
SEC CHARGES ALBANY, NY RESIDENT WITH CONDUCTING $5.9 MILLION PONZI SCHEME
On May 24, 2010, the Securities and Exchange Commission filed an injunctive action charging Albany, New York resident Christopher W. Bass and various entities he controlled with conducting a Ponzi scheme through which Defendants fraudulently obtained approximately $5.9 million from over 400 investors.
The Commission's complaint, filed in the United States District Court for the Northern District of New York, alleges that from at least January 2007 through at least June 2009, Bass told prospective investors that he could pool their money and have European money managers invest the funds in various enterprises in Europe. Bass claimed that these managers historically had generated monthly returns ranging from 2.8 % to 6 %. Bass conducted his scheme through a company called Swiss Capital Harbor-USA LLC ("SCH") and three limited partnerships, Swiss Capital Harbor Fund A Partners, L.P., Swiss Capital Harbor Fund B Partners, L.P. and Swiss Capital Harbor Fund C Partners, L.P. (the "SCH LPs").
According to the Commission's complaint, Bass's representations were false, and Bass did not invest investors' money as claimed. Instead, Defendants used most of the funds to pay Bass's personal expenses, to pay the operating expenses of SCH and the SCH-LPs, and to satisfy investors' redemption requests.
The Complaint charges Bass, SCH and the SCH LPs with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The Commission seeks a final judgment enjoining Defendants from committing future violations of the foregoing federal securities laws and ordering them to disgorge ill-gotten gains plus prejudgment interest thereon and assessing civil penalties.
The Commission acknowledges the assistance of the United States Attorney's Office for the Northern District of New York.
See Also: SEC Complaint