SEC v. Locke Capital Management, Inc. and Leila C. Jenkins

SEC Complaint against Locke Capital Management, Inc. and Leila C. Jenkins


The SEC Complaint alleges that Locke and Jenkins invented a billion-dollar client in order to gain credibility and attract legitimate investors. Jenkins lied to SEC staff about the existence of the invented client and furnished the staff with bogus documents. Even as Locke began to take on real clients, the assets under management of its real clients never amounted to more than a very small portion of the billion-plus dollars that Jenkins claimed to manage. They continued to make false statement concerning the confidential accounts were made in brochures, meetings, submissions to online databases that prospective clients used to select money managers, and in SEC filings. Besides the invented client and assets under management, they misrepresented performance for years in which Locke had no clients and deceived clients about the makeup of the firm, including the number, identity, and role of its employees.

The Complaint alleges that Locke and Jenkins violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 207 of the Investment Advisers Act of 1940. The Complaint further alleges that Locke violated, and Jenkins aided and abetted violations of, Sections 204, 204A, and 206(4) of the Advisers Act and Rules 204-2(a), 204A-1, and 206(4)-1(a)(5) thereunder.

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Reference Info:Pleadings | Federal, 1st Circuit, Rhode Island | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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