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SEC v. Brantley Capital Management, LLC, et al. Case No. 09-cv-01906-JG (N.D. Ohio)

Aug. 29, 2022

On August 13, 2009, the Commission filed a complaint against Robert Pinkas ("Pinkas"), an investment adviser; his firm, Brantley Capital Management, LLC ("BCM"); and, its former part-time chief financial officer, Tab Keplinger ("Keplinger") (collectively, the "Defendants"). The complaint alleged that, from 2002 through 2005, the Defendants committed securities fraud by overvaluing assets in an investment portfolio they managed in order to generate higher investment advisory fees. As a result, the Defendants received more than $6.4 million in investment advisory fees from BCM, which were calculated as a percentage of BCM's net asset value. The complaint further alleged that the Defendants made material misrepresentations and failed to make required disclosures to BCM's board of directors, independent auditors, and investors. See Complaint.

Pinkas was ordered to pay a total of $957,729.00 in disgorgement, prejudgment interest and civil penalties. The Clerk was ordered to hold the funds in an interest bearing account with the Court Registry Investment System (collectively, the "Fund"), pending further order of the Court. See Pinkas' Final Judgment. Keplinger was ordered to pay a $50,000.00 civil penalty to United States Treasury and BCM was not ordered to pay any monetary sanctions. See Keplinger's Final Judgment. As ordered, Pinkas has paid a total of $957,729.00 into the Fund for the distribution to harmed investors. 

On January 6, 2011, the Court appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Fund.

On July 8, 2013, the Commission filed a motion to approve a distribution plan, together with the distribution plan.

On July 29, 2013, the Court established a Fair Fund ("Fair Fund") for the $957,729.00 in disgorgement, prejudgment interest, and penalties paid by Pinkas and appointed Epiq Systems, Inc. as the Distribution Agent to oversee the administration and distribution of the Fair Fund to harmed investors. See Order to Establish Fair Fund and Appoint Distribution Agent.

Also, on July 29, 2013, the Court modified the Commission's proposed distribution plan and entered the distribution plan ("Distribution Plan"). See Distribution Plan.

The Distribution Plan provides that the distribution of the Fair Fund shall be made on a pro rata basis among Eligible Claimants according to each Eligible Claimant's Net Recognized Loss pursuant to the Loss Formula described in detail in Article III of the Distribution Plan.

On October 29, 2014, the Commission filed a motion to transfer funds to the Distribution Agent for disbursement to Eligible Claimants and to authorize the payment of taxes, fees and expenses. See Commission's Motion. On December 1, 2014, the Court granted the Commission's motion and entered an order to disburse $835,235.00 from the Fair Fund for the distribution to Eligible Claimants and authorized the payment of the Distribution Agent's fees and expenses, taxes, and the Tax Administrator's fees and expenses. See Order Approving Disbursement.

With approximately $104,280.29 remaining in the Fair Fund, on May 9, 2016, the Commission filed a motion to authorize a second distribution to certain Eligible Claimants and to pay taxes, fees, and expenses. See Commission's Motion. On June 21, 2016, the Court granted the Commission's motion and entered an order to disburse the balance of the Fair Fund to certain Eligible Claimants, minus a reserve of $8,128.79 for taxes and Tax Administrator fees and expenses and $14,286.00 for Distribution Agent fees and expenses. See Order Authorizing a Second Distribution to Certain Eligible Claimants.

For more information, please contact the Distribution Agent: 

Epiq Systems, Inc
Telephone Number: 877-868-8230

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