SEC Charges Investment Adviser Dolphin Associates and Donald Netter for Deceiving Investors
The U.S. Securities and Exchange Commission (SEC) has taken action against Dolphin Associates III and Donald T. Netter for allegedly misleading investors and mishandling funds. According to the SEC, Dolphin and Netter suspended withdrawals from a private fund since November 2016, using the money for long-term investments in small-cap equities without disclosing Netter’s personal ownership of the same securities, creating a conflict of interest.
The SEC also claims that Dolphin and Netter charged excessive fees, failed to conduct required annual audits, and did not distribute financial reports as outlined in the Fund’s organizational documents. Investors were allegedly provided with misleading information about the fund’s liquidity and the efforts being made to return funds to them.
To address these issues, the SEC has filed a complaint in the U.S. District Court for the District of Connecticut, citing violations of antifraud provisions under the Investment Advisers Act of 1940. The SEC is seeking injunctive relief, the return of funds plus interest, and civil monetary penalties from Dolphin and Netter. It’s essential for investors to be aware of such actions to protect their financial interests.
