SEC charges founder of bankrupt New Jersey RIA with fraud
The U.S. Securities and Exchange Commission headquarters in Washington, D.C., U.S., on Monday, April 19, 2010. Photographer: Brendan Hoffman/Bloomberg News
Agency says Donald LaGuardia Jr. misappropriated $2.6 million from investors.
The Securities and Exchange Commission has charged Donald S. LaGuardia Jr., a founder and managing principal of L-R Managers, for misappropriating approximately $2.6 million from investors and then concealing part of the misappropriation through fraudulent accounting.
(More: SEC bars former assistant over alleged misappropriation of funds)
The SEC’s complaint alleges that beginning in at least 2013, Mr. LaGuardia, of Lavallette, N.J., misappropriated investor money from private funds advised by L-R Managers and from subscriptions intended to be invested in one of the funds. He then allegedly concealed part of this misappropriation through a sham receivable and promissory note.
According to the complaint, Mr. LaGuardia used the money to pay for personal expenses, including home renovations, and business expenses for his New York-based firm, including salaries and rent. The complaint also alleges that Mr. LaGuardia and L-R Managers used other accounting devices to inflate the capital account balances and returns reported to investors and made material misrepresentations about fund audits, expenses and performance. L-R Managers filed for bankruptcy in June 2017.
The SEC is seeking permanent injunctions and financial penalties against Mr. LaGuardia, and the return of allegedly ill-gotten gains with prejudgment interest.
(More: SEC censures, bars and penalizes RIA for misappropriation of more than $121,000)
Mr. LaGuardia’s LinkedIn profile describes him as “a pioneer in frontier market investing with over 20 years of experience navigating these obscure and nascent markets.” Before starting his own firm, he spent five years as an equity analyst with Rockefeller & Co.
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