Washington D.C., (CelebrityAccess) — The Securities and Exchange Commission announced that they are pursuing fraud charges against the former president of a little-known Live Nation financial advisory and management subsidiary SFX Financial Advisory Management Enterprises. The firm provides financial advice and services to current and former professional athletes.
The SEC Enforcement Division alleges that SFX’s former president Brian J. Ourand misused his position to steal approximately $670,000 from the accounts of several clients by writing checks to himself and initiating wires from client accounts for his own benefit.
The SEC also charged SFX and its CCO Eugene S. Mason, alleging that they failed to properly supervise Ourand, violated the custody rule, and made a false statement in a regulatory filing. The SEC alleges that Mason caused some of SFX’s compliance failures by failing to conduct reviews of cash flows in client accounts as stipulated in the firm's compliance policies and for not conducting an annual compliace review.
Mason also was responsible for a misstatement in SFX’s Form ADV that client accounts were reviewed several times each week. SFX and Mason agreed to pay penalties of $150,000 and $25,000 respectively.
“Investment advisers have a fiduciary obligation to safeguard client assets,” said Marshall S. Sprung, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “SFX failed to detect an alleged misappropriation for years because it had insufficient internal controls to limit Ourand’s ability to withdraw client funds for personal use.”
Ourand, SFX and Live Nation were previously sued by former heavyweight boxer Mike Tyson, who, in 2013, alleged that Ourand stole more than $300,000 from him. – Staff Writers