SEC says firm, founder lost or spent $3M of investors’ money in fraud

investmentnews.com:

An investment firm and its founder have been charged by the SEC with running an investment scheme which defrauded investors of at least $3 million.

The agency says that for three years Joshua Goltry and JAG Capital Advisors LLC lied to nine investors about almost every aspect of the investment in purported equity fund, JAG Cap, LLC. Goltry is the principal of JAG Advisors and founder and chief investment officer of the purported fund.

The allegations include that Goltry and JAD Advisors spent $1.1 million of the funds raised on personal expenses, such as jewelry and travel, and lost $1.7 million on high-risk trading and speculative investments. Investors were misled on the performance, investment activity, and investment risks of the purported fund.

It’s also alleged that Goltry and JAG Advisors falsified documents, including expense invoices, to conceal the trading losses from investors.  

“As alleged in the complaint, Goltry and JAG Advisors repeatedly lied to investors to lure them into investing in the JAG Fund and then lost their money or stole it to pay for lavish personal expenses,” said Nicholas P. Grippo, Regional Director of the SEC’s Philadelphia Regional Office. “We will continue to diligently hold accountable those who exploit investors’ trust for personal gain.”

Goltry and JAG Advisors agreed to settle the charges against them including violating federal securities laws. This is subject to court agreement with the court also making the decision on the amounts of disgorgement, prejudgment interest, and civil penalties at a later date. Criminal charges have been instigated by the U.S. Attorney’s Office for the District of New Jersey.