SEC v. ICP Asset Management, LLC et al.
Case No. 10-cv-04791-LAK (S.D.N.Y.)
On June 21, 2010 the Commission filed a complaint against ICP Asset Management, LLC ("ICPA"), an investment advisory firm; Thomas Priore ("Priore"), its founder, owner and, president; ICP Securities, LLC ("ICPS"), its affiliated broker-dealer; and Institutional Credit Partners, LLC ("ICP"), its holding company (collectively, the "Defendants”), alleging repeated violations of the federal securities laws. At relevant times, ICP was the asset manager of four multi-billion-dollar collateralized debt obligations: Triaxx Prime CDO 2006-1, Ltd.; Triaxx Prime CDO 2006-2, Ltd.; Triaxx Prime CDO 2007-1, Ltd.; and Triaxx Funding High Grade I, Ltd. (the “Triaxx CDOs”). According to the Complaint, beginning in 2007, as the mortgage markets deteriorated, the Defendants engaged in improper transactions that defrauded the Triaxx CDOs of tens of millions of dollars and placed them at risk of substantial additional losses in the future. The SEC alleged that many of the improper transactions were done to favor the Triaxx Funding High Grade I, Ltd. CDO over the other Triaxx CDOs. The SEC further alleged that, in March 2010, Priore transferred assets into trusts that he had created during the SEC’s investigations and the SEC named, as relief defendants, the trustees of those trusts. The SEC charged the Defendants with, among other things, violations of the anti-fraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. See Complaint.
The Defendants were ordered to pay a total of $23,653,981.00 in disgorgement, prejudgment interest, and penalties. The Commission was ordered to hold all funds, together with interest and income earned thereon (collectively, the "Fund"), pending further order of the Court. See Defendants' Final Judgment.
Priore has paid as ordered, a total of $1,501,204.00 into the Fund for the distribution to harmed investors.
On January 10, 2017, the SEC filed a motion to create a Fair Fund for the $1,501,204.00 paid by the Defendants and any future funds collected or otherwise received in this matter, appoint Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Fair Fund, and appoint Nichola L. Timmons, a Commission employee, as the Distribution Agent to oversee the administration and distribution of the Fair Fund to harmed investors. See Motion.
On February 10, 2017, the Court entered an order approving the Commission's motion to create a Fair Fund and appointed Damasco & Associates LLP as the Tax Administrator and Nichola L. Timmons as the Distribution Agent of the Fair Fund.
On approximately March 15, 2017, the Commission received $15,916,089.74, which was added to the Fair Fund.
The Fair Fund currently holds over $22 million and resides in an interest-bearing account at the U.S. Treasury’s Bureau of Fiscal Service. On August 7, 2020, the Commission filed a Motion for an Order Appointing a Distribution Agent, Discharging the Fund Administrator, and Related Relief. Interested parties can ascertain the status of the matter and anticipated future action by reviewing the Memorandum accompanying that filing. See the Commission’s Motion and Memorandum.
On August 17, 2020, the Court entered an order approving the Commission's motion for an Order Appointing a Distribution Agent, Discharging the Fund Administrator, and Related Relief. See the Court Order.
For more information, please contact the Commission:
Office of Distributions