Litigation Release No. 23204 / February 23, 2015

Securities and Exchange Commission v. GLR Capital Management, LLC, et al., Civil Action No. 12-cv-2663-EJD (N.D. Cal.)

SEC Obtains Final Judgment Against John A. Geringer and Glr Advisors, LLC

The Securities and Exchange Commission announced that on February 3, 2015, the Honorable Edward J. Davila of the United States District Court for the Northern District of California entered final judgment against defendants John A. Geringer and GLR Advisors, LLC (GLR Advisors). The final judgment imposes on Geringer and GLR Advisors a permanent injunction against future violations of certain antifraud provisions of the federal securities laws and orders them to pay disgorgement and prejudgment interest of $2,772,475.

In its amended complaint, the SEC alleged that Geringer and GLR Advisors ran the GLR Growth Fund, L.P. (Fund), based in Scotts Valley, California, like a Ponzi scheme and defrauded investors by touting imaginary trading profits instead of reporting the actual trading losses they had incurred. According to the amended complaint, the Fund raised $60 million from investors, mostly in the Santa Cruz, California area.

On June 4, 2014, Geringer pleaded guilty to federal criminal charges of conspiracy to commit mail and wire fraud, mail fraud, and securities fraud in a parallel criminal action before the United States District Court for the Northern District of California in United States v. Geringer, et al., Criminal Action No. 12-cr-888-EJD (N.D. Cal.). He awaits sentencing.

The final judgment against Geringer and GLR Advisors, entered by consent, permanently enjoins them from violating Section 17(a) of the Securities Act of 1933, Sections 10(b) and 26 of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. In addition, the final judgment orders Geringer and GLR Advisors to pay disgorgement and prejudgment interest of $2,772,475 jointly and severally, which shall be deemed satisfied upon the entry of an order requiring Geringer to pay restitution and/or forfeiture in the related federal criminal case against him.

In related administrative proceedings, Geringer consented to an SEC order barring him from the securities industry (In the Matter of John A. Geringer, File No. 3-16376 (Feb. 6, 2015)) and GLR Advisors consented to an SEC order in which it was censured (In the Matter of GLR Advisors, LLC, File No. 3-16377 (Feb. 6, 2015)).

For additional information, see Litigation Release Nos. 22375 (May 24, 2012), 22580 (Dec. 21, 2012) and Administrative Proceeding Release Nos. IA-4022 (Feb. 6, 2015) and IA-4023 (Feb. 6, 2015).