Court Orders Worcester Investment Adviser To Pay $12.6M
Ruling in a U.S. Securities and Exchange Commission case, the Massachusetts Federal District Court has ordered a Worcester man and the firms he once ran to hand over $12.6 million.
The ruling confirms a 2008 criminal court ruling that originally levied the $12.6 million penalty.
Amit Mathur, his investment advisory firm Entrust Capital Management Inc. and AMR Realty LLC, which he controlled, were defendants in a civil case brought by the SEC in 2005.
The final ruling Friday bars Mathur and his companies from violating fraud provisions of the Securities and Exchange Act of 1934 and orders him to pay restitution.
Mathur and his partner Raheev Johar were accused by the SEC of misappropriating clients' money in a purported hedge fund at Entrust.
The SEC argued that about 20 clients invested more than $16 million with Entrust after being lied to by Mathur and Johar about the assets they managed and the returns the fund generated.
Mathur and Johar "dissipated" clients' money in investments where it was lost, or used it for personal purposes, the SEC said. The SEC also argued that Mathur and Johar transferred at least $1 million in investor funds to AMR Realty.
Johar was tried in separate administrative proceedings and in 2007 was ordered to give up $600,000 in ill-gotten gains and barred from associating with any investment adviser.
In 2008, Mathur was convicted in a parallel criminal case brought by the Massachusetts U.S. Attorney's office. He was sentenced to 10 years in federal prison and ordered to pay the $12.6 million in restitution.
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