SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17238 / November 16, 2001.
UNITED STATES ATTORNEY'S OFFICE INDICTS RECIDIVIST SECURITIES LAW VIOLATOR FOR MAIL AND WIRE FRAUD
United States v. Steven H. Adler, Criminal Action No. 8:01-CR-413-T-24-MSS (M.D. Fla., Tampa Division, November 6, 2001)
On November 6, 2001, the United States Attorney's Office for the Middle District of Florida (USAO) indicted Steven H. Adler of Tampa, Florida, charging him with mail and wire fraud. The indictment is based on allegations that Adler violated the law by convincing investors to entrust their money to him, and then misappropriating those funds. On November 15, 2001, the Securities and Exchange Commission (SEC) instituted an administrative order making findings against Adler.
The indictment alleges that Adler solicited and received funds from investors between October 1994 and September 1998, while he was the president and majority owner of Vector Index Advisers, Inc. (Vector), formerly based in Tampa. The indictment also alleges that Adler was the president of a mutual fund formerly known as ASM Index 30 Fund (ASM), and that Vector was ASM's investment adviser. According to the indictment, Adler solicited money from people who wished to invest in ASM, but in some cases, he never invested the money. Instead, Adler kept the money and used it for his own or for Vector's expenses. In other cases, the indictment alleges that Adler did invest the funds, but then withdrew the money from ASM without the knowledge or consent of the investors. The indictment alleges that Adler also then used that money for his own or Vector's benefit.
The indictment further charges Adler with preparing, and furnishing to the investors, fictitious monthly statements that falsely assured the investors that their investments were intact, and were appreciating in value.
The SEC's administrative order is based on the same misconduct described in the USAO's indictment. In the Matter of Vector Index Advisors, Inc. and Steven H. Adler, Securities Act of 1933 Release No. 8034 (November 15, 2001). The Commission also instituted an order imposing a cease-and-desist order against Adler in 1996, In the Matter of Vector Index Advisors, Inc. and Steven H. Adler, Investment Advisors Act of 1940 Release No. 1569 (July 8, 1996).