Commission Brings Action Against Billion Dollar Advisory of Russian Citizen
The Investment Advisers Act requires that firms or individuals that are in the business of advising others about securities investments and are compensated for their services register with the Commission with few exceptions. A number of provisions of the Advisers Act are designed to protect clients. Some provisions of the Advisers Act are designed to protect the securities markets and the national economy. The Act, accordingly, requires those who have $25 million under management, with certain exceptions, to register. The Commission’s latest cases on this question is SEC v. Concord Management LLC, Civil Action No. 23-cv-8253 (S.D.N.Y. Filed September 19, 2023).
Despite the dictates of the Advisers Act, Defendants Concord Management LLC and Michael Martin have operated an advisory that has had billions of dollars under management for years. Defendant Concord Management is based in Tarrytown New York. Mr. Martin was born in Russia and emigrated to the United States in 1988. He now resides in New York state and is a U.S. citizen. He founded Concord in 1988. The firm has only one client, UBO. A, a Russian individual that is the ultimate beneficial owner (UBO) of all the assets under management by Concord.
Mr. Martin has operated an advisory for the benefit of his one client since 1999. The advisory, which has a complex structure, provides supervisory and management services so that the client’s assets are continuously invested in a diverse portfolio of US private fund investments. Over time the size of the investments has increased. By 2012, for example, Respondents employed about a dozen investment professionals. As of January 2022, Concord managed a private fund portfolio with an estimated value of $7.2 billion.
From 2012 through 2022 Respondents received about $85 million in total compensation from its client. The client ownership of the private fund investments through an interrelated group of entities. Concord, however, is one business.
In March 2022 the client was designated as a sanctioned individual by the U.K. and the EU. The assets were frozen. Since the freeze Respondents have not actively engaged in investment activity. Nevertheless, many of the underlying remain active. The Order alleges violations of Advisers Act Section 209(d). The case is in litigation.
Commission Brings Action Against Billion Dollar Advisory of Russian Citizen
The Investment Advisers Act requires that firms or individuals that are in the business of advising others about securities investments and are compensated for their services register with the Commission with few exceptions. A number of provisions of the Advisers Act are designed to protect clients. Some provisions of the Advisers Act are designed to protect the securities markets and the national economy. The Act, accordingly, requires those who have $25 million under management, with certain exceptions, to register. The Commission’s latest cases on this question is SEC v. Concord Management LLC, Civil Action No. 23-cv-8253 (S.D.N.Y. Filed September 19, 2023).
Despite the dictates of the Advisers Act, Defendants Concord Management LLC and Michael Martin have operated an advisory that has had billions of dollars under management for years. Defendant Concord Management is based in Tarrytown New York. Mr. Martin was born in Russia and emigrated to the United States in 1988. He now resides in New York state and is a U.S. citizen. He founded Concord in 1988. The firm has only one client, UBO. A, a Russian individual that is the ultimate beneficial owner (UBO) of all the assets under management by Concord.
Mr. Martin has operated an advisory for the benefit of his one client since 1999. The advisory, which has a complex structure, provides supervisory and management services so that the client’s assets are continuously invested in a diverse portfolio of US private fund investments. Over time the size of the investments has increased. By 2012, for example, Respondents employed about a dozen investment professionals. As of January 2022, Concord managed a private fund portfolio with an estimated value of $7.2 billion.
From 2012 through 2022 Respondents received about $85 million in total compensation from its client. The client ownership of the private fund investments through an interrelated group of entities. Concord, however, is one business.
In March 2022 the client was designated as a sanctioned individual by the U.K. and the EU. The assets were frozen. Since the freeze Respondents have not actively engaged in investment activity. Nevertheless, many of the underlying remain active. The Order alleges violations of Advisers Act Section 209(d). The case is in litigation.