SEC bars New York adviser for fraud
Justin D. Meadlin will pay more than $300,000 for inflating firm's AUM, touting nonexistent fund.
The Securities and Exchange Commission has barred Justin D. Meadlin from the securities industry for using false and misleading information “to induce prospective investors and clients to invest money” with him and his firm, New York-based Hyaline Capital Management.
The SEC also said in a litigation release that the U.S. District Court for the Southern District of New York has entered judgments of consent and ordered Mr. Meadlin to disgorge $150,645.66, plus interest, and pay a civil monetary penalty of $150,000.
In a complaint filed in April, the SEC alleged that Mr. Meadlin disseminated dozens of emails to prospective investors and clients in which he materially inflated Hyaline’s assets under management. The complaint also alleged that he touted a fictitious quantitative fund in email solicitations to more than two dozen prospective investors and in subscription hedge fund databases.
(More: SEC charges Connecticut hybrid with fraud.)
The SEC said that Mr. Meadlin claimed the fund had as much as $25 million in assets, and he published consistently positive historical performance returns for it dating back to 2009 that purportedly came from a “proprietary” algorithm that he acquired.
According to the complaint, to which Mr. Meadlin consented, none of this was true. The fund did not exist, and never had, and Mr. Meadlin never acquired or created any “proprietary” algorithm. Nor had it achieved the touted historical returns. Based on his fraudulent misrepresentations and omissions, the SEC said some people invested money with Mr. Meadlin and Hyaline.
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