SEC charges adviser with stealing $9 million intended for charity

John Rogicki, also his firm's chief compliance officer, is the second person at New York-based Train Babcock Advisors to face fraud-related charges

Oct 20, 2017 @ 12:32 pm

By InvestmentNews

The Securities and Exchange Commission has charged New York-based adviser John Rogicki with defrauding a non-profit charitable foundation out of $9 million.

The SEC alleges that Mr. Rogicki, managing director and chief compliance officer of Train Babcock Advisors, has been stealing funds from the charity for a dozen years to purchase real estate and pay for his own lifestyle. According to the SEC's complaint, an elderly woman established the charitable foundation to fund health and education causes from her estate.

In the release, the SEC said that Mr. Rogicki served not only as investment adviser to the charitable foundation but also as its president and a trustee, and he allegedly took advantage of his roles by liquidating securities positions in the foundation's advisory account and transferring the money for his personal benefit.

The SEC seeks a permanent injunction, disgorgement and prejudgment interest, and penalties against Mr. Rogicki. In a parallel action, Manhattan District Attorney Cyrus Vance Jr., brought criminal charges against him.

Last December, Brian Keenan, a former financial adviser with Train Babcock, pleaded guilty to stealing more than $1.6 million from the beneficiaries of three trusts that he managed, according to a statement from the Manhattan district attorney's office.

According to the statement, one of Mr. Keenan's responsibilities was to serve as a trustee, making him responsible for managing the trusts, which belong to members of the same family, and acting in the best interests of the beneficiaries. From approximately May 2007 to August 2012, when he was employed at the firm, Mr. Keenan stole money that he spent on personal expenses, including credit card payments.

The Train Babcock website says that the Manhattan-based registered investment advisory firm manages more than $400 million for more than 200 families and individuals.

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