U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19345 / August 23, 2005
SEC v. Barry Alan Bingham and Bingham Capital Management Corporation, Civil Action No. 1:05-CV-2187 (NDGA August 23, 2005)
The Securities and Exchange Commission announced that on August 23, 2005, it filed a complaint in the United States District Court for the Northern District of Georgia, against Barry Alan Bingham ("Bingham") and Bingham Capital Management Corporation ("Capital Management").
The Commission's complaint alleges that, from approximately April 2001 to approximately November 2002, Bingham used misrepresentations and omissions of material fact to defraud at least 22 investors in Bingham Growth Partners, L.P. ("Growth Partners"), a hedge fund that Bingham created and managed through Capital Management, an unregistered investment adviser. The complaint further alleges that, over the lifetime of Growth Partners, Bingham offered and sold at least $1,826,218 of shares in the Fund, at least $459,483 of which were offered and sold on the basis of Bingham's misrepresentations to investors about the Fund's past returns. Additionally, the complaint alleges that, between July 2001 and November 2002, Bingham misappropriated approximately $141,637 in Growth Partners' assets, including as much as $34,638 in client assets as "soft dollar credits" generated from Growth Partners' trading commissions. The complaint alleges that, by November 2002, the assets of Growth Partners had been wholly depleted by a combination of Bingham's trading losses and his misappropriations.
The Commission's complaint charges defendants Bingham and Capital Management with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Investment Advisers Act of 1940. The complaint seeks against Bingham and Capital Management permanent injunctive relief from future violations, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.