SEC Settles Securities Fraud Charges Against Former Investment Adviser
Litigation Release No. 24801 / April 22, 2020
Securities and Exchange Commission v. Bekkedam, Civil Action No. 2:14-cv-02488-NIQA (E.D. Pa., filed April 30, 2014)
The Securities and Exchange Commission today announced that defendant Barry R. Bekkedam has agreed to resolve the SEC's charges that he fraudulently induced, or assisted others in inducing, his advisory clients and others to invest approximately $100 million in an investment that was later discovered to be a Ponzi scheme orchestrated by attorney Scott Rothstein, who was later convicted for the scheme.
According to the SEC's complaint, filed on April 30, 2014, from April 2009 through October 2009, Bekkedam made material misrepresentations and omissions and failed to disclose conflicts of interest when soliciting his clients and others to invest in a fund that allegedly purchased lawsuit settlements from Rothstein. The complaint alleged, among other things, that Bekkedam misrepresented the level of due diligence that he had performed on the investment.
Under the terms of the settlement, which is subject to court approval, Bekkedam has agreed to be permanently enjoined from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and to pay disgorgement of $150,000 plus prejudgment interest in the amount of $70,969.
Bekkedam previously was convicted in a related criminal case and sentenced to a prison term of 11 months followed by 3 years of supervised release and ordered to pay a fine in the amount of $100,000.
The litigation was led by Christopher R. Kelly and supervised by Kelly L. Gibson, Regional Director, in the Philadelphia Regional Office. The litigation followed an examination conducted by Philadelphia Regional Office examination staff Andrew B. Green, Kevin P. Logue, William M. Lavin and Ly T. Nguyen, under the supervision of Frank A. Thomas.