SEC Charges Wyoming Investment Adviser and Its Principal With Misappropriating Client Funds
June 29, 2018
File No. 3-18559
June 29, 2018 – The Securities and Exchange Commission today announced that investment adviser Grand Teton Capital Management, LLC and its principal, Bruce A. Hauptman of Wilson, Wyoming, agreed to settle charges that they defrauded their private fund client, Grand Teton Capital Partners, LP, and its investors by misappropriating client funds and making inappropriate investments.
According to the SEC's order instituting administrative and cease-and-desist proceedings, Hauptman and Grand Teton Capital Management, LLC misappropriated more than $120,000 of fund assets and used a portion of the misappropriated funds to make payments to Hauptman's personal creditors. The order also finds that Hauptman made numerous inappropriate investments, including a substantial investment into an entity run by one of his friends. In total, the order finds that investors lost over $430,000 as a result of the fraudulent conduct by Hauptman and Grand Teton Capital Management, LLC.
The SEC's order finds that Hauptman and Grand Teton Capital Management willfully violated Sections 206(1), (2), and (4) and Section 207 of the Investment Advisers Act of 1940 and Rules 206(4)-8(a)(1) and (a)(2) thereunder. Without admitting or denying the SEC's findings, Hauptman and Grand Teton Capital Management consented to a cease-and-desist order and to pay, joint and severally, disgorgement of $121,026.49 and pre-judgment interest of 20,417.35. Grand Teton Capital Management further consented to be censured, and Hauptman additionally consented to be barred from the securities industry and to pay a civil money penalty of $160,000.
The SEC's investigation was conducted by Michael Hoke and supervised by Assistant Regional Director Jason Burt of the Denver Regional Office.