In early 2017, Behn also advised a client to purchase a 10 percent interest in his RIA Fieldstone for $1 million “to support and expand Fieldstone’s business,” the SEC said. Behn also “discouraged the client from seeking an independent valuation of the firm before investing,” the agency said.
Contrary to his representation, Behn used about half the client’s money to pay his personal taxes and make other payments to himself or for his personal benefit, according to the order. In April 2014, Behn entered into the two financial arrangements with Aequitas that provided money for Behn to use to pay his personal expenses and a line of credit for Fieldstone in exchange for client purchases of Aequitas and its entities promissory notes.
In 2016, the SEC charged Aequitas Management and its affiliates and three top executives with hiding the rapidly deteriorating financial condition of its enterprise while raising more than $350 million from investors. Aequitas Management and the affiliates allegedly defrauded more than 1,500 investors nationwide into believing they were making health-care, education- and transportation-related investments when their money was really being used to pay early investors in a last-ditch effort to save the firm.
In that case, Aequitas and the affiliates agreed to not raise any additional funds and to the appointment of a receiver to disburse Aequitas assets to defrauded investors, the SEC said.