U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23176 / January 22, 2015
Securities and Exchange Commission v. MayfieldGentry Realty Advisors, LLC, et al., Case No. 13-cv-12520
SEC Obtains Final Judgment Against COO of Investment Adviser That Defrauded Detroit Pension Fund
The Securities and Exchange Commission announced today that on January 21, 2015, the Honorable Nancy G. Edmunds of the United States District Court for the Eastern District of Michigan entered a final judgment against defendant Marsha Bass, who was the chief operating officer and a part-owner of Detroit-based MayfieldGentry Realty Advisors, LLC. The final judgment imposes on Bass a permanent injunction against future violations of certain antifraud provisions of the federal securities laws and orders Bass to pay a civil penalty of $35,000.
In its Complaint, the SEC alleged that Chauncey C. Mayfield, the founder, president, and CEO of MayfieldGentry, took nearly $3.1 million from the Police and Fire Retirement System of the City of Detroit without obtaining permission. He used it to purchase two strip malls in California and title them in the name of a MayfieldGentry affiliate. Other executives at MayfieldGentry, including Bass, gradually became aware that Mayfield had siphoned money away from their biggest client. Rather than come clean about the theft and risk losing the sizeable business the firm received from the pension fund, MayfieldGentry officials instead devised a plan to secretly repay the pension fund by cutting costs at the firm and selling the strip malls. Their plan ultimately failed when MayfieldGentry could not raise enough capital to put the stolen amount back into the pension fund.
Without admitting or denying the SEC's allegations, Bass agreed to settle the case against her. The final judgment permanently enjoins Bass from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In addition, the final judgment orders Bass to pay a civil penalty of $35,000. Mayfield and MayfieldGentry previously settled the case against them. The litigation against the remaining MayfieldGentry executives is pending.
For additional information, see Litigation Release No. 22720 (June 10,2013).