Barred California adviser to pay $181,000 over investment fund conflicts
The Securities and Exchange Commission stands in Washington, D.C., U.S. on Tuesday, Oct. 1, 2013. The U.S. government began its first partial shutdown in 17 years, idling as many as 800,000 federal employees, closing national parks and halting some services after Congress failed to break a partisan deadlock by a midnight deadline.Photographer: Joshua Roberts/Bloomberg
Mitchell Friedman failed to disclose how he profited from funding arrangements.
The Securities and Exchange Commission has barred adviser Mitchell Friedman of Mill Valley, Calif., and required him to pay disgorgement, interest and civil penalties of about $181,000 over conflicts and disclosure failures in connection with investment funds he ran.
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According to an SEC cease and desist order, Mr. Mitchell failed to disclose to Sharpe 4 Partners, a private fund he advised, of material conflicts of interest arising from his arrangement with a separate private foreclosure fund to receive fees based on the assets invested in the fund by Sharpe 4 Partners. Mr. Friedman also misled two investors who unknowingly purchased Mr. Friedman’s own investment in the foreclosure fund, the SEC said.
From February 2013 to February 2014, Mr. Friedman received payments totaling $54,565 as a result of his arrangement with the fund, which added approximately 10% to the annual management fee that he earned from Sharpe 4 Capital.
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As part of his settlement, Mr. Friedman agreed to pay disgorgement of $69,312 and prejudgment interest of $17,023 to the SEC, plus a civil penalty of $94,713.
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