U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25834 / September 19, 2023
Securities and Exchange Commission v. William E. Miller, No. 1:23-civ-08261 (S.D.N.Y. filed Sept. 19, 2023)
SEC Charges Adviser Who Made Misstatements to Fund Investors
The Securities and Exchange Commission today announced charges against William E. Miller in connection with misstatements he made to two investors, a charter school and a real estate fund, in Woodstock Capital Partners, L.P. ("Woodstock Partners"), a pooled investment vehicle. Miller solicited investors for Woodstock Partners on behalf of Woodstock Capital, LLC ("Woodstock Capital"), the unregistered investment adviser that managed Woodstock Partners, and Woodstock Master Capital, Ltd. (the "Woodstock Fund"), the master fund into which Woodstock Partners invested all of its assets.
The SEC's complaint, filed in United States District Court for the Southern District of New York, alleges that Miller, between August and November 2019, made material misstatements to the two investors in Woodstock Partners. According to the complaint, Miller materially misstated the Woodstock Fund's investment strategy to each investor, for example by representing that the Woodstock Fund would invest in government bonds and other debt securities. The complaint alleges that, in reality, Miller was part of the decision by Woodstock Capital to engage offshore traders to conduct trading on behalf of the Woodstock Fund, and that the offshore traders primarily traded derivative products. As alleged in the complaint, Miller made other material misstatements including telling both investors that Woodstock Capital was registered as an investment adviser with the SEC, which it was not, and misstating the Woodstock Fund's performance. The two investors ultimately lost more than $4 million of their respective $5 million capital contributions.
The SEC's complaint charges Miller with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(b) thereunder, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The complaint seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties.
The SEC's investigation was conducted by William Conway, Nicholas Karasimas and Sandeep Satwalekar in the New York Regional Office. The litigation will be led by Travis Hill, Mr. Karasimas, and Mr. Satwalekar. The case is being supervised by Thomas P. Smith, Jr.