According to the press release, "The SEC alleges that Jenkins lied to the SEC staff about the existence of the invented client and furnished the SEC staff with bogus documents in 2008, including fake account statements that she created."
The complain alleges that Leila Jenkins and her firm Locke Capital Management told investors and prospective investors that she was managing over $1 billion for a "confidential" Swiss client. By claiming to have that much money under management in her marketing materials, Ms. Jenkins was allegedly able to impute credibility on her fund and recruit new investors.
What's interesting about this is that it appears to be a straight-up false and misleading advertising case -- there is no mention of missing funds, hidden losses, or misappropriated client money. But by misleading investors with lies, the SEC is alleging that Ms. Jenkins engaged in securities fraud.
An attorney representing Jenkins told Bloomberg that the fund "has significantly outperformed the applicable indexes through remarkably difficult recent times in the market. Locke's investors have fared better than they would have in the average fund." Of course, that has nothing to do with the SEC's allegations, but it's still a good try.
The most unique part of this case is the fact that the alleged culprit is a woman: When was the last time you heard about an investment scheme perpetrated by a lady?
Reader Comments (Page 1 of 1)
3-10-2009 @ 9:54AM
beanspants said...
Cruella de Ville selling dog fur coats. That's when.