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In the Matter of Scott T. Wolfrum
Admin. Proc. File No. 3-20252

Feb. 8, 2023

On March 24, 2021, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Scott T. Wolfrum (“Wolfrum” or the “Respondent”). In the Order, the Commission found that the Respondent failed to disclose conflicts of interest when recommending that his advisory clients invest in Foundry Mezzanine Opportunity Fund (“FMOF” or the “Fund”), a private fund that provides lending to and invests in small businesses. From December 2015 to June 2018, Wolfrum sold more than $20 million in interests in FOMF, almost all of which were recommended by Wolfrum and sold to his advisory clients. Wolfrum failed to disclose to his clients the conflicts of interest created by his and his family member's financial interests in two of the Fund's holdings and Wolfrum's receipt of $140,125 in finder's fees for facilitating two different investments by the Fund. The Commission ordered the Respondent to pay $140,125.00 in disgorgement, $21,354.00 in prejudgment interest, and a $75,000.00 civil money penalty, for a total of $236,479.00, to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty paid, along with the disgorgement and interest paid, can be distributed to harmed investors (the “Fair Fund”). See the Commission’s Order: Release No. 34-91401.

The Fair Fund includes the $236,479.00 paid by the Respondent. The Fair Fund and has been deposited in Commission-designated account at the U.S. Department of the Treasury, and any interest accrued will be added to the Fair Fund.

On November 22, 2023, the Commission issued an order that the Fair Fund established in the Sadek Order is consolidated with the Fair Fund established in the Wolfrum Order for the purposes of distribution administration. See the Commission’s Order: Release No. 34-99010.

On December 4, 2023, the Commission issued an order appointing Miller Kaplan Arase LLP as the Tax Administrator of the Wolfrum Fair Fund. See the Commission’s Order: Release No 34-99078.

On February 12, 2024, 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 Proposed Plan proposes that Keshia W. Ellis, a Commission employee, serve as the Fund Administrator to oversee the administration and distribution of the Fair Fund. The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-99513 and the Proposed Plan.

The Proposed Plan provides that the distribution of theFair Fund shall be made to those injured investors identified by Commission staff during its investigation who suffered losses in connection with the undisclosed use and misappropriation of finder’s fees associated with investing in the Foundry Mezzanine Opportunity Fund from January 4, 2016, through October 12, 2017.

For more information, please contact the Fund Administrator:

Keshia Ellis
Telephone Number: (202) 551-4406
Email: Elliskw@SEC.GOV

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