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Press Release


SEC: Biotech Venture Capitalist Stole Investor Funds for Personal Use

Washington D.C., March 30, 2016

The Securities and Exchange Commission today announced that a San Francisco-based biotech venture capitalist has agreed to settle charges that he siphoned money from a fund managed by his firm in order to prop up other struggling businesses he owned and finance his lavish lifestyle.

An SEC investigation found that G. Steven Burrill concealed from investors that he took money from the Burrill Life Sciences Capital Fund III under the guise of “advanced” management fees and spent it on family vacations to St. Barts and Paris as well as jewelry, gifts, car service, and private jets.

Burrill and his firm Burrill Capital Management agreed to the disgorgement of $4.785 million in investor money he stole for personal use plus a $1 million penalty.  Burrill also agreed to be permanently barred from the securities industry.  The fund’s investors included state pension funds, public companies, and other institutional investors.

“Even though they are exempt from registration, venture capital advisers like Burrill have fiduciary obligations to their clients that we will enforce,” said Andrew J. Ceresney, Director of the SEC’s Enforcement Division.  “Burrill spent his fund’s capital on whatever he pleased, and elevated his own interests above those of investors.”

The SEC’s order instituting a settled administrative proceeding also finds that Burrill Capital Management’s chief legal officer Victor A. Hebert and controller Helena C. Sen played integral roles in Burrill’s scheme.  Hebert led investment committee meetings and agreed to call in additional capital from fund investors while knowing the money would be spent on expenses unrelated to the fund.  Burrill and Sen on at least two instances delayed distribution of payments owed to fund investors so money could instead be used to continue paying Burrill’s personal expenses as well as the salaries of Hebert and Sen. 

Hebert and Sen agreed to settle the charges by paying penalties of $185,000 and $90,000, respectively.  They also are barred from the securities industry.

“Gatekeepers play an essential role in every company.  Rather than take a stand for the fund’s investors, Hebert and Sen allowed Burrill’s scheme to perpetuate and their salaries were paid out of money Burrill misappropriated from investors,” said Jina Choi, Director of the SEC’s San Francisco Regional Office.

Burrill and his firm, Hebert, and Sen agreed to the settlements without admitting or denying the findings in the SEC’s order.  In addition to their industry bars, Burrill, a former audit partner, and Sen are permanently suspended from appearing and practicing before the SEC as accountants, which includes not participating in the financial reporting or audits of public companies.  Hebert is permanently suspended from appearing and practicing before the SEC as an attorney.

The SEC’s continuing investigation is being conducted by Heather E. Marlow and John Roscigno and supervised by Tracy Davis in the San Francisco office.  An SEC examination that contributed to the investigation was conducted by Peter Bloom, Matthew O’Toole, Brad Darfler, Jeffery Lyttle, Shanti Radkar, Ed Haddad and Stephanie Wilson of the San Francisco office. 


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