SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16834 / December 19, 2000
SEC v. PAUL J. SILVESTER, ET AL., Civil Action No. 3:00 CV 1941 DJS (D. Conn.) (U.S. District Court for the District of Connecticut - Filed October 10, 2000)
LANDMARK PARTNERS AND ITS CHAIRMAN, STANLEY F. ALFELD, SETTLE SEC FRAUD CHARGES; LANDMARK AGREES TO PAY $100,000 IN CIVIL PENALTIES AND ALFELD AGREES TO PAY $50,000.
The Securities and Exchange Commission announced today that the U.S. District Court for the District of Connecticut entered final judgments on December 18, 2000 against Landmark Partners, Inc., a Connecticut private equity firm, and its chairman, Stanley F. Alfeld, pursuant to their settlement of civil fraud charges brought by the Commission. The charges arose out of an alleged fraudulent scheme involving the former Connecticut state treasurer's investment of state pension fund money with private equity firms, including Landmark, in exchange for the firms' agreement to pay lucrative finder's fees to the treasurer's friends and associates. In a complaint filed in the United States District Court for the District of Connecticut on October 10, 2000, the Commission alleged that Paul J. Silvester, the former Treasurer of the State of Connecticut, agreed to invest $150 million of state pension funds with Landmark in 1998. The complaint alleged that in return, Landmark and Alfeld agreed to pay $1.5 million in finder's fees to Silvester's friends, Ben F. Andrews, Jr. and Christopher A. Stack (who was paid through his consulting firm, KCATS, LLC). To secure the pension fund investment, Alfeld, the complaint alleged, agreed to retain Andrews as a consultant, and arranged for Andrews and Stack to be paid through Rogers & Wells, LLP, a New York City law firm.
The complaint alleged that Landmark and Alfeld violated their fiduciary duty to the state pension fund by failing to disclose the alleged quid pro quo arrangement. Landmark and Alfeld, without admitting or denying the allegations contained in the Commission's complaint, have agreed to the entry of final judgments that enjoin them from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Landmark has also agreed to pay $100,000 in civil penalties and Alfeld has agreed to pay $50,000. Alfeld is a resident of Simsbury, Connecticut.
Silvester, Stack and KCATS have previously settled with the Commission. The case remains pending against six additional defendants.
For further information please see Litigation Release No. 16759.