SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19478 / November 30, 2005
SECURITIES AND EXCHANGE COMMISSION v. VINCENT A. LENARCIC, JR. AND NEW VISION INVESTMENT FUNDS, LLC, DEFENDANTS, AND QMA INVESTMENT MANAGEMENT, LLC, RELIEF DEFENDANT, Civil Action File No. 3:05-CV-487-H (W.D.N.C.).
SEC CHARGES VINCENT A. LENARCIC, JR. AND AN AFFILIATED COMPANY WITH SECURITIES AND INVESTMENT ADVISER FRAUD
The Securities and Exchange Commission filed an enforcement action in the United States District Court for the Western District of North Carolina on November 21, 2005, charging Vincent A. Lenarcic, Jr. and New Vision Investment Funds, LLC ("New Vision") with securities and investment adviser fraud in connection with the sale of securities held by Fundamental Growth Investors, LP ("Fundamental"). Fundamental is a hedge fund for which New Vision and Lenarcic served as investment advisers. The complaint alleges that Lenarcic and New Vision funneled proceeds of the securities sales to New Vision and QMA Investment Management, LLC ("QMA"), an investment adviser registered with the Commission. Lenarcic managed and controlled QMA.
The complaint alleges that from June 2000 to December 2003, Lenarcic of Charlotte, NC, and New Vision, a limited liability company located in Charlotte, misappropriated at least $807,000 by selling securities in Fundamental's account and funneling the proceeds to QMA and New Vision, companies controlled by Lenarcic. The complaint further alleges that the funds were misappropriated and spent in a manner contrary to the representations made to Fundamental's investors in Fundamental's offering materials. The complaint also alleges that Lenarcic and New Vision, in violation of their fiduciary duties to their advisory clients, misled, and failed to disclose their actions to the Fundamental investors, and that they thereby violated 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 (2) of the Investment Advisers Act of 1940.
The complaint seeks permanent injunctive relief, an accounting, disgorgement plus prejudgment interest and civil penalties from Lenarcic and New Vision and seeks disgorgement of the misappropriated funds received from Fundamental plus prejudgment interest from QMA.