U.S. Securities and Exchange Commission
Litigation Release No. 21517 / May 5, 2010
Securities and Exchange Commission v. William A. DiBella, Civil Action No. 3:04-CV-1342 (EBB) (D. Conn.)
SEC Announces Distribution of DiBella Fair Fund to Connecticut Retirement and Trust Funds
The Securities and Exchange Commission today was granted final court approval of a Fair Fund distribution that will return $795,000 to the State of Connecticut Retirement and Trust Funds that were harmed by a fraudulent scheme perpetrated by the former president of the Connecticut State Senate, William A. DiBella.
The federal district court in New Haven, Conn., ordered the disbursement of the SEC Fair Fund, which was established after DiBella paid court-ordered disgorgement, prejudgment interest, and penalties assessed in an SEC enforcement action. On May 18, 2007, following a seven-day trial, a jury returned a verdict finding DiBella liable for aiding and abetting violations of various securities laws.
In its 2004 complaint, the SEC alleged that DiBella and his consulting company, North Cove, participated in a fraudulent scheme with the former Treasurer of the State of Connecticut, Paul Silvester, concerning Silvester's investment of $75 million on behalf of the Connecticut Retirement and Trust Funds with investment advisor, Thayer Capital Partners. Although neither Mr. DiBella nor North Cove had any role in the investment of the funds with Thayer, and performed no meaningful work related to the investment, Silvester nevertheless requested that Thayer pay DiBella fees based upon a percentage of the total investment with Thayer. Thayer ultimately paid DiBella a total of $374,500 through North Cove.
On March 24, 2008, the court entered a Final Judgment against DiBella ordering him to pay a civil penalty and disgorgement and prejudgment interest. Due to Mr. DiBella's continued non-payment of the judgment, the Commission instituted contempt proceedings with the federal court in New Haven. DiBella finally paid more than $795,000 on March 12, 2010, and the funds will now be distributed to the funds for the benefit of harmed investors.