In the Matter of Centaur Management Co. LLC Admin. Proc. File No. 3-14950
Aug. 31, 2022
On July 17, 2012, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Centaur Management Co. LLC (“Respondent”). In the Order, the Commission found that, from January 1, 2006 through April 2, 2009, the Respondent violated federal securities laws by directing its client, Argent Classic Convertible Arbitrage Fund L.P. (“Argent Classic”), to provide the Respondent and certain funds it managed with approximately $15 million in interest-free loans, and failed to disclose adequately such loans to Argent Classic's investors. As Argent Classic’s investment adviser, the Respondent breached its fiduciary duty to its client by misappropriating Argent Classic’s funds to make itself interest-free loans, thus depriving Argent Classic of the use of those funds. The Respondent also made false or misleading material statements of facts and omitted to state material facts to Argent Classic’s investors when it failed to disclose the interest-free loan practice. The Respondent ultimately repaid the approximately $15 million in interest-free loans to Argent Classic. The Commission ordered the Respondent to pay a total of $364,322.00 in disgorgement, prejudgment interest, and civil money penalty to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalty, along with the disgorgement and prejudgment interest, collected can be distributed to those harmed by the Respondent’s conduct described in the Order (the “Fair Fund”). See the Commission’s Order: Release No. IA-3432.
On September 11, 2012, the Commission issued an order appointing Damasco & Associates LLP (“Damasco”) as the Tax Administrator of the Fair Fund. Damasco was acquired by Miller Kaplan Arase LLP and on June 30, 2017, the Commission issued a notice of name change for the Tax Administrator.
On March 15, 2013, the Commission issued an order appointing Gilardi & Co. 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. 34-69150.
On May 17, 2013, 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 provided the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-69604 and the Proposed Plan.
On July 22, 2013, the Commission issued an order approving the plan of distribution and published the approved plan of distribution (“Plan”). See the Commission’s Order: Release No. 34-70015 and the Plan.
The Plan provides that the distribution of the Fair Fund shall be made to harmed investors, identified by the Commission staff during its investigation of this matter, in accordance with the methodology detailed in the Plan.
On April 23, 2015, the Commission issued an order approving the disbursement of $232,650.68 from the Fair Fund for distribution to eligible investors. See the Commission’s Order: Release No. 34-74802.
For more information, please contact the Fund Administrator:
Gilardi & Co. LLC
Telephone Number: 888-283-8009