A San Marino, Calif., advisory firm and its owner have been charged by the Securities and Exchange Commission with misleading investors about the profitability of a fund the investors had put $1.7 million of their money into, the SEC announced Thursday.
Tweed Investment Services Inc. and Robert R. “Rusty” Tweed of Glendale, Calif., formed Athenian Fund L.P. and raised more than $1.7 million from 24 investors. The investors’ money was supposed to be invested in a master fund that would use a quantitative stock trading strategy.
Instead, Tweed and the firm, which he owned, invested the funds in two other investments, including a loan to a third party, that ultimately lost approximately $800,000, and then concealed those losses from the investors by issuing false and misleading account statements that made the fund appear to be profitable.
The SEC says Tweed and his firm misled investors for years, and only disclosed the losses after SEC examiners and state regulators uncovered the fraud during routine examinations.