SEC v. Savva
Case No. 16-cv-05432-AMD-JO (E.D.N.Y.)
On September 29, 2016, the Commission filed a complaint against Nicholas Savva (“Defendant”). The complaint alleged that, from May 2015 through February 2016, the Defendant violated federal securities laws by making false and misleading statements while soliciting approximately $1.4 million from 12 investors in the Defendant’s hedge fund, Five Star Capital Fund LP. See Complaint.
The Defendant was ordered to pay a total of $218,708.78 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 Defendents’ Final Judgment.
The Defendant has paid a total of $218,708.78 into the Fund for distribution to harmed investors.
On June 13, 2017, the Court appointed Miller Kaplan Arase LLP as the Tax Administrator to fulfill the tax obligations of the Fund.
On July 18, 2017 the Commission filed a motion to establish a Fair Fund, appoint a plan administrator, and approve a plan of distribution, together with the plan of distribution. See Motion and Distribution Plan.
On July 18, 2017, the Court entered an order that established a Fair Fund for the $218,708.78 in disgorgement, prejudgment interest, and penalty paid by the Defendant, appointed Michael S. Lim as the Plan Administrator to oversee the administration and distribution of the Fair Fund to harmed investors, and approved the Distribution Plan. See the Court’s Order.
The Distribution Plan provides that the distribution of the Fair Fund shall be made on a pro rata basis to the Eligible Recipients, who were harmed by the Defendant’s misconduct and suffered a net loss.
The Plan Administrator successfully disbursed $211,308.78 to Eligible Recipients in accordance with the Distribution Plan, and on October 16, 2018, the Commission filed a motion for an order to approve the final accounting, terminate the Fair Fund, discharge the Pln Administrator, and transfer the residual funds to the U.S. Treasury. See the Commission's Motion.
The distribution in this case was closed on October 17, 2018, when the Court granted the Commission’s motion and entered an order approving the final accounting, terminating the Fair Fund, discharging the Plan Administrator, and transferring the residual funds to the U.S. Treasury. See the Court's Order.