Court Enters Final Judgment Against Hedge Fund Manager
Litigation Release No. 25226 / September 27, 2021
Securities and Exchange Commission v. Nicholas J. Genovese, Willow Creek Investments, LP, and Willow Creek Advisors, LLC, No. 18-cv-942 (S.D.N.Y.)
On August 4, 2021, the United States District Court for the Southern District of New York entered a final judgment against Defendants Nicholas J. Genovese, Willow Creek Investments, LP, and Willow Creek Advisors, LLC, who were charged by the SEC for a brazen offering and investment adviser fraud.
The SEC's complaint, filed on February 2, 2018, alleged that Genovese and his the Willow Creek entities raised more than $5.3 million from at least six investors by lying about his prior securities industry experience and size of operations, and by concealing his past criminal history. The court previously entered a preliminary injunction and asset freeze that remained in effect during the pendency of the case. In July 2021, the court granted the SEC's motions for summary judgment and default judgment, finding that Genovese misrepresented his background and expertise, as well as the nature of Willow Creek, to induce investments.
Pursuant to the judgment, Genovese and Willow Creek Investments were permanently enjoined from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule l0b-5 thereunder, and Genovese and Willow Creek Advisors were permanently enjoined from future violations of Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Genovese was also ordered to pay a $1 million civil penalty.
The SEC's litigation was conducted by Alexander Vasilescu, Karen Lee, and James Hanson, and was supervised by Sanjay Wadhwa and Gerald Gross.