U.S. Securities and Exchange Commission

Litigation Release No. 21497 / April 21, 2010

SEC v. Jeffrey R. Neufeld and Paridon Capital Management LLC f/k/a Tritone Capital Management, LLC, Case No. 10-CV-02399 (N.D. Ill.)


The Securities and Exchange Commission today announced that it has obtained a preliminary injunction against Paridon Capital Management LLC, an investment adviser, and its principal Jeffrey R. Neufeld, both of Elgin, IL. In its complaint, the SEC charged Paridon and Neufeld with fraudulently operating the TCM Global Strategy Fund, a hedge fund, since 2006.

According to the complaint, Paridon and Neufeld, age 35, reported false and fictitious rates of return to prospective and actual investors. From the inception of the hedge fund, Paridon and Neufeld reported inflated returns as well as returns that were generated by "paper" trading in a model portfolio rather than by actual trading. The complaint alleges that Paridon and Neufeld reported these returns, as well as inflated figures for assets under management, in connection with offering and selling interests in the TCM Global Strategy Fund. Although the fund had total investments of $250,000, Neufeld and Paridon at one point claimed assets of $1.07 million. Investors in the fund also received false performance data in monthly and quarterly statements. In addition, according to the complaint, Paridon and Neufeld caused the fund to use a significant portion of its investor funds to purchase alleged "debt securities" issued by Paridon. These "debt securities" were not permitted investments for the fund according to its offering documents, were not properly disclosed and consented to by the fund, and were improperly marked up by Paridon and Neufeld to offset certain trading losses.

The Honorable John F. Grady, United States District Judge in the Northern District of Illinois, entered a preliminary injunction which prevents Paridon and Neufeld from violating certain provisions of the securities laws, orders the preservation of documents, and requires Paridon and Neufeld to fully assist the Commission in performing an accounting of the TCM Global Fund and any other funds created or controlled by the defendants, including the Paridon Currency Fund, LP. Paridon and Neufeld consented to entry of the relief.

The SEC's complaint charges Paridon and Neufeld with violating the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(3) of the Investment Advisers Act of 1940 (Advisers Act) as well as Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. In addition to the preliminary relief, the SEC's complaint seeks permanent injunctions, disgorgement, prejudgment interest, and financial penalties against all defendants.

See Also: SEC Complaint


Last modified: 4/22/2010