UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Investment Advisers Act of 1940
Release No. 2248 / June 15, 2004
File No. 3-11519
SEC Institutes Proceedings Against Ian L. Renert Based on Entry of Injunction
On June 15, 2004, the Commission entered an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Order) against Ian L. Renert (Renert). In the Order, the Division of Enforcement alleges that, on April 14, 2004 a final judgment was entered against Renert in the civil action entitled Securities and Exchange Commission v. Ian L. Renert, et al., Civil Action Number 301-CV-1027 (PCD) , before the United States District Court for the District of Connecticut. The judgment permanently enjoined Renert from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Sections 206(1) and 206(2) of the Investment Advisers Act of 1940; and Section 7(d) of the Investment Company Act of 1940. The violations occurred from 1997 through 2000, during which time Renert was associated with an unregistered investment adviser, Hawthorne Sterling & Co. (Hawthorne).
The Commission's complaint, filed in June 2001, alleged that Renert, the owner and control person of Hawthorne, was the architect of a $22 million fraudulent offering of interests in unregistered offshore mutual funds. The Commission alleged in its complaint that from at least June 1997 through June 2000, Renert and Hawthorne induced more than 700 investors in 49 states and more than 100 investors overseas to purchase interests in 30 entities known as the Hawthorne Sterling Family of Funds. According to the complaint, Renert and Hawthorne misrepresented via the Internet, offshore seminars and a network of sales agents that the funds would invest in bank debentures, which in this case, were fictitious prime bank instruments. The Commission also alleged that Renert and Hawthorne failed to disclose that Renert used fund assets to engage in day trading in Internet stocks, losing at least $2.2 million, and to fund a mortgage on one of Renert's homes.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Renert an opportunity to dispute these allegations, and to determine what remedial sanctions, if any, are appropriate and in the public interest. The Commission directed that an administrative law judge shall issue an initial decision in this matter within 210 days from the date of service of the Order.
See also the Order in this matter