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SEC Charges Colorado Man with Multiple Fraudulent Schemes

Sept. 17, 2019

ADMINISTRATIVE PROCEEDING
File Nos. 3-19461, 3-19462, and 3-19463

The Securities and Exchange Commission today announced settled fraud charges against Tyler T. Tysdal of Lone Tree, Colorado, for his role in multiple schemes to defraud investors.

First, the SEC's order finds that between January 2014 and October 2016, Tysdal and his business partner Grant M. Carter of Johns Creek, Georgia, defrauded investors of Cobalt Sports Capital, LLC, an entity they formed to make loans to athletes and sports agencies. According to the SEC's order, rather than using investor proceeds to make loans to athletes, Tysdal and Carter diverted over $15 million to the cash-strapped startup portfolio companies of Impact Opportunities Fund, L.P., a private fund that Tysdal managed through his investment adviser Impact Opportunities Fund Management, LLC (IOFM) and concealed those loans from debt investors in Cobalt. Ultimately, each of the portfolio companies failed, resulting in significant losses to debt investors in Cobalt.

Second, the SEC order finds that Tysdal and IOFM defrauded the Impact Opportunities Fund and its investors by, among other things, charging the fund undisclosed monitoring fees, a portion of which went to Tysdal.

Third, the SEC order finds that Tysdal defrauded private fund TitleCard Capital 1Fund, L.P. and its investors through two advisers that he controlled, TitleCard Capital Management, LLC (TCCM) and TitleCard Capital Group, LLC (TCCG). According to the order, Tysdal and the two advisers breached the fund's concentration limits by causing the fund to purchase Cobalt from Impact Opportunities Fund at the end of 2015. The order finds that TCCG and Tysdal defrauded the fund and its investors by falsely valuing the fund's investment in Cobalt in reports to investors, effectively concealing the concentration limit breaches.

The SEC also announced settled charges against two other individuals, Britt J. Haugland and Michael A. DeJager, for their roles in Tysdal and Carter's fraudulent schemes. The SEC's order related to Haugland finds that she assisted Tysdal and Carter's scheme to divert investor funds from Cobalt to the portfolio companies, while the SEC order related to DeJager finds that he was a cause of TCCG's violations.

The SEC's orders find that Tysdal, TCCM, and TCCG willfully violated Sections 206(1) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and that DeJager caused TCCG's violations of Section 206(4) and Rule 206(4)-8. The orders also find that Tysdal willfully violated, and Carter violated, Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c) thereunder, and that Haugland caused their violations of Section 17(a)(3) of the Securities Act. All of the respondents consented, without admitting or denying the facts of the SEC's orders, to the entry of cease-and-desist orders. Tysdal also consented to a three-year collateral associational bar and an investment company bar, and IOFM, TCCM, and TCCG consented to censures. The orders require Tysdal to pay disgorgement and prejudgment interest totaling $843,099 and a civil penalty of $320,000, require Carter to pay a civil penalty of $160,000, and require Haugland and DeJager to each pay a civil penalty of $15,000.

The SEC's investigation was conducted by Noel M. Franklin and supervised by Ian S. Karpel of the Denver Regional Office.

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