In the Matter of GMB Capital Management LLC, et al.
Admin. Proc. File No. 3-14854
On April 20, 2012, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Gabriel Bitran and Marco Bitran, hedge fund managers and their firms, GMB Capital Management LLC (currently known as Clearstream Investments LLC) and GMB Capital Partners LLC (collectively, the “Respondents”). In the Order, the Commission found that, from 2005 through 2008, the Respondents violated the federal securities laws by misleading investors about their investment strategy and past performance. During that time, the Respondents raised over $500 million for eight hedge funds and various managed accounts. The Commission ordered the Respondents to pay a total of $4,800,000.00 in disgorgement and civil penalties. The Commission also created a Fair Fund (the “Fair Fund”), pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalties, along with the disgorgement, could be distributed to harmed investors. See the Commission’s order: Release No. 33-9315.
On January 30, 2013, the Commission issued an order appointing Damasco & Associates LLP as the Tax Administrator of the Fair Fund. Damasco was acquired by Miller Kaplan Arase LLP and on June 30, 2017, the Commission issued a notice of name change for the Tax Administrator.
On October 21, 2016, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provided the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s notice: Release No. 34-79139 and the Proposed Plan.
The Plan provides that the Fair Fund will be transferred to a related criminal action, United States v. Bitran, No. 14-cr-10243-MLW (D. Mass. 2014) (“Criminal Action”), pursuant to Rule 1102(a) of the Commission’s Rules on Fair Funds and Disgorgement Plans, 17 C.F.R. § 201.1102(a), for distribution to harmed investors in accordance with the restitution process in the Criminal Action.
For more information, please contact the United States Attorney’s Office:
Financial Litigation Unit
1 Courthouse Way, Suite 9200
Boston, MA, 02210
Telephone Number: 617-748-3100