A Connecticut-based investment advisory business and its owner have been charged with stealing $3.95 million from investors, including more than $1 million that was used to settle a private lawsuit, the Securities and Exchange Commission announced Thursday.
Sentinel Growth Fund Management, based in Stamford, Conn., and its founder Mark J. Varacchi of Norwalk, Conn., misrepresented to investors that money they deposited with the firm would be allocated to up-and-coming hedge fund managers for investment purposes, the SEC complaint says.
Varacchi and Sentinel Growth Fund Management commingled investor assets and manipulated account activity, account balances and investment returns as part of a scheme to siphon away investor funds. Part of the money was used to settle litigation brought by Varacchi’s former, unnamed employer, the SEC says.
The SEC’s complaint seeks disgorgement and penalties against Varacchi and Sentinel Growth Fund Management.