On March 9, 2021, the Securities and Exchange Commission (“SEC”), represented by John V. Donnelly, III attorney at the SEC’s Philadelphia Regional Office filed a civil enforcement action against George Heckler (“Heckler” or “Defendant”), seeking injunctive relief, disgorgement of all ill-gotten gains among other reliefs for defrauding investors and two hedge funds. This case was filed in U.S. District Court for the District of New Jersey with Judge Andre M. Espinosa, Judge Leda D. Wettre, and Judge Madeline C. Arleo presiding.
In its complaint, the SEC alleged that “between 2009 and 2019, Heckler defrauded investors and CV Special Opportunity Fund LP (“CV Special”) and Cassatt Short Term Trading Fund LP (“Cassatt”) (together, the “Funds”), two hedge funds he advised and controlled. He repeatedly misled investors by telling them they were earning consistent gains while, in reality, their money had not been invested as promised (or at all), and the value of the money that had been invested was decimated by poor performing investments.” and that “Heckler helped form Cassatt and CV Special as a means to shift and cover-up investor losses incurred by a predecessor fund that was also controlled by Heckler. After transferring poorly performing assets of the predecessor fund to CV Special and Cassatt, Heckler lied to investors about nearly every aspect of the Funds, including their basic purpose, investment strategy, and poor performance.”
The SEC further alleged that “Heckler, along with the fund administrator of Cassatt and CV Special (“Individual 1”), concealed the truth about the Funds by, among other things, providing investors with false account statements and Forms K-1 showing that Cassatt and CV Special consistently generated positive returns. Heckler also frequently used new investor capital raised through Cassatt to redeem existing investors. Over the course of the fraud, Heckler raised at least $90 million through the Funds and the Heckler Entities. Of this amount, Heckler used more than $30 million to repay prior investors. In that same time period, Heckler took more than $1 million for himself and his family in the form of purported fees or distributions.” and even further that “In addition, throughout 2018, Heckler made false statements directly to investors orally and in writing assuring them that their money was safe and blaming the delay in returning their capital on Individual 1’s departure.”
There are four claims for relief laid down by the SEC. The first claim is for violations of Section 17(a) of the Securities Act, the second claim for relief is for violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, the third claim of relief is for violations of Section 206(1) and (2) of the Advisers Act, and the last claim is for violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder.
In its prayer for relief, the SEC has requested the court to permanently restrain and enjoin Heckler from violating the laws alleged in the complaint, order disgorgement of ill-gotten gains derived and order Heckler to pay civil penalties.
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Disposed - Other Disposed
Madeline Cox Arleo
Leda D. Wettre
Andre M. Espinosa
SECURITIES AND EXCHANGE COMMISSION
JOHN V. DONNELLY, III
Attorney at U.S. SECURITIES & EXCHANGE COMMISSION
1617 Jfk Boulevard, Suite 520
Philadelphia, PA 19103
Civil Cover Sheet
Text of Proposed Judgment
Certificate of Service
Docket***Civil Case Terminated. (ld, ) (Entered: 04/21/2021)Read MoreRead Less
Docket(#4) ORDER/JUDGMENT AS TO DEFENDANT GEORGE HECKLER; that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security;etc. Signed by Judge Madeline Cox Arleo on 4/21/2021. (ld, ) (Entered: 04/21/2021)Read MoreRead Less
DocketCase Reassigned to Magistrate Judge Andre M. Espinosa. Magistrate Judge Leda D. Wettre no longer assigned to the case. (krg, ) (Entered: 04/12/2021)Read MoreRead Less
Docket(#3) NOTICE by SECURITIES AND EXCHANGE COMMISSION of Consent of George Heckler to Injunction (Attachments: #1 Text of Proposed Judgment, #2 Certificate of Service)(DONNELLY, JOHN) (Entered: 03/11/2021)Read MoreRead Less
Docket(#2) SUMMONS ISSUED as to GEORGE HECKLER. Attached is the official court Summons, please fill out Defendant and Plaintiffs attorney information and serve. (ld, ) (Entered: 03/11/2021)Read MoreRead Less
DocketJudge Madeline Cox Arleo and Magistrate Judge Leda D. Wettre added. (ps) (Entered: 03/09/2021)Read MoreRead Less
Docket(#1) COMPLAINT against GEORGE HECKLER with JURY DEMAND, filed by SECURITIES AND EXCHANGE COMMISSION. (Attachments: #1 Civil Cover Sheet)(DONNELLY, JOHN) (Entered: 03/09/2021)Read MoreRead Less
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