Former San Marino Broker Barred by SEC for False and Misleading Statements to InvestorsThursday, July 30, 2020
On July 16, 2020, the Securities and Exchange Commission (SEC) issued an Order Instituting Administrative Proceedings against Robert (“Rusty”) Tweed, a San Marino, California resident and registered representative. Tweed was previously associated with CapWest Securities, Inc. (April 2011 – August 2011), Concorde Investment Services, LLC (August 2011 – November 2015), and Cabot Lodge Securities LLC (October 2015 – December 2019). Tweed has also owned and controlled an investment advisor firm, Tweed Financial Services, Inc., since 1999.
The SEC alleges that Tweed violated numerous securities industry rules by making false and misleading statements to customers to induce them to invest in his hedge fund, the Athenian Fund, L.P. The Complaint alleged that Tweed failed to disclose the loss of investors’ capital, failed to provide audited financial statements to investors and other activities to mislead investors, in connection with the management of the Athenian Fund.
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement filed a similar complaint against Tweed in 2019 alleging that Tweed obtained more than $1.6 million from his retail customers through a false and misleading private placement memorandum (PPM) he used to offer and sell interests in Athenian Fund. Ultimately, 23 customers invested in the fund without an understanding of the potential fees and costs associated with the Athenian Fund, Tweed’s control over this fund, and the entities and individual who had immediate control over the money that they invested.
According to the SEC’s Complaint, the person that had control over the investors’ money was committing bank fraud and engaging in fraudulent trading in an unrelated pooled investment program while handling investments for Athenian Fund LP. FINRA alleges that shortly after the Athenian Fund offering ended, this person transferred $650,000 of investors’ funds to a third party financier, purportedly to support a gold mining venture through an entity called Luminary Investment Services LLC. In total, 14 investors lost approximately $1,040,000.
In the July 16, 2020 Order, the SEC deemed it appropriate and in public interest to impose sanctions, including barring Tweed from association with any broker, dealer, investment adviser, municipal securities dealer and other securities industry position as well as barring him from any offering of a penny stock.
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