Locke Capital Management Inc. and its chief executive, Leila Jenkins, lied repeatedly to customers by inventing clients who supposedly lived in Switzerland and had more than $1 billion in assets, the SEC charged today.
Locke Capital Management Inc. and its chief executive, Leila Jenkins, lied repeatedly to customers by inventing clients who supposedly lived in Switzerland and had more than $1 billion in assets, the Securities and Exchange Commission charged today.
Ms. Jenkins, CEO, president and chief investment officer of the Newport, R.I.-based investment advisory firm, invented a “massive” phony customers in order to land real clients, the SEC said in a complaint filed in the U.S. District Court for the District of Rhode Island. In addition, she lied to SEC staff about the existence of the invented client and furnished the agency with bogus documents, including fake account statements, the agency said.
Ms. Jenkins maintains residences in Newport and Palm Beach, Fla., the SEC said. International securities officials assisted the SEC in making the case, including the U.K. Financial Services Authority, the Swiss Financial Market Supervisory Authority and Spain’s Comisión Nacional del Mercado de Valores.
The SEC said it is continuing to investigate the case.
The fraud was conducted from at least 2003 to 2009, the SEC said. Ms. Jenkins and Locke, which listed $1.3 billion in assets on an ADV disclosure form dated Feb. 2008, also misrepresented the performance of the advisory firm for years, according to the SEC’s release.
The conduct “was particularly egregious because Jenkins lied to the SEC staff to try to escape detection,” SEC enforcement division director George Curtis said in the release.
"We've not yet been served with the complaint, but to our understanding there's no issue here of any client funds or securities being missing or misappropriated," said Ed Searby, a partner with Cleveland law firm McDonald Hopkins LLC, who represents Ms. Jenkins and Locke Capital Management.
