In the Matter of Ross, Sinclaire & Associates, LLC, et al.
Admin. Proc. File No. 3-17315
On June 23, 2016, the Commission instituted and simultaneously settled cease and desist proceedings against Ross, Sinclaire & Associates, LLC ("RSA"), a registered broker-dealer and Murray Sinclaire, Jr. ("Sinclaire"), RSA's president and CEO (collectively, the "Respondents"). The Commission found that, from at least January 2007 through December 2012, the Respondents allowed Nicholas L. Fry II ("Fry"), president of registered investment adviser Fry Hensley and Company ("FHC"), to take advantage of his close relationship with RSA to carry out a fraudulent scheme whereby Fry charged his advisory clients inflated commissions through RSA. RSA permitted Fry to be involved in effecting equity securities trades through various transaction charges for FHC clients at RSA, despite knowing that Fry did not have the required license to do this work. The Respondents permitted Fry and FHC to directly benefit from the higher charges by paying Jane Fry, Fry's spouse, half of the transaction charges that RSA collected on Fry's equity trades; RSA also benefited by keeping the other half of the transaction charges.
As a result of the Respondents' misconduct, the Commission ordered the Respondents to pay a total of $952,574.70 in disgorgement, prejudgment interest, and civil penalties. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the civil penalties, along with the disgorgement and prejudgment interest, may be distributed to those harmed by the Respondents' misconduct. See the Commission's Order: Release No. 34-78147.
The Respondents have paid a total of $952,574.70 into the Fair Fund for distribution to harmed investors.
On July 13, 2017, the Commission issued an order appointing Miller Kaplan Arase LLP as the Tax Administrator of the Fair Fund.
On September 21, 2017, the Commission issued an order appointing Analytics Consulting, LLC, as the Fund Administrator to oversee the administration and distribution of the Fair Fund, and setting the administrator’s bond amount. See the Commission’s order: Release No. 34-81674.
On May 3, 2018, 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 provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-83162 and the Proposed Plan.
The Proposed Plan provides that the Net Fair Fund shall be distributed to eligible investors, who suffered a Recognized Loss, in accordance with the methodology described in the Proposed Plan.
On June 14, 2018, the Commission issued an order approving the Proposed Plan, and simultaneously published the approved Plan of Distribution (the "Plan"). See the Commission's Order: Release No. 34-83436 and the Plan.
For more information, please contact the Fund Administrator: