U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23122 / October 28, 2014
Securities and Exchange Commission v. Francisco Illarramendi, Highview Point Partners, LLC and Michael Kenwood Capital Management, LLC, as Defendants, and Highview Point Master Fund, Ltd., Highview Point Offshore, Ltd., Highview Point LP, Michael Kenwood Asset Management, LLC, Michael Kenwood Energy and Infrastructure LLC, and MKEI Solar, LP, as Relief Defendants, Civil Action No. 3:11cv-78
Court Approves Initial Distribution of $264 Million to Harmed Investors in SEC Ponzi Scheme Case Against Connecticut-Based Hedge Fund Manager
The Securities and Exchange Commission announced today that on October 27, 2014, a federal court in Connecticut approved a receiver's plan to distribute assets to the victims of the fraud allegedly perpetrated by Connecticut-based hedge fund manager Francisco Illarramendi, and approved an initial distribution amount of $264,580,160 from the assets recovered to date.
In January 2011, the SEC charged Illarramendi and various entities owned or controlled by him, including investment advisers Highview Point Partners, LLC, and Michael Kenwood Capital Management, LLC, with engaging in a multi-year Ponzi scheme involving hundreds of millions of dollars. On February 3, 2011, the U.S. District Court for the District of Connecticut appointed a receiver in the case to marshal the assets of a number of entities formerly owned or controlled by defendants Illarramendi, Highview Point Partners, and Michael Kenwood Capital Management. The receiver has collected substantial assets to distribute to parties harmed by the defendants' alleged wrongdoing, and the Court has approved the receiver's initial plan to distribute over $264 million. The receiver plans to make additional distributions to harmed parties at a later time as additional funds become available.
The SEC's action against Illarramendi and others remains pending. In a parallel criminal action, on March 7, 2011, Illarramendi pleaded guilty to two counts of wire fraud, one count of securities fraud, one count of investment advisor fraud, and one count of conspiracy to obstruct justice, to obstruct an official proceeding and to defraud the SEC. He is awaiting sentencing. Also, on August 3, 2011, the Commission issued an Order by consent barring Illarramendi from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
The SEC acknowledges and appreciates the assistance of the U.S. Attorney's Office for the District of Connecticut and the Federal Bureau of Investigation.
For further information, see Litigation Release No. 21828 (January 28, 2011), No. 21875 (March 7, 2011); No. 21970 (May 16, 2011); Litigation Release No. 22015 (June 28, 2011), Litigation Release No. 22245 (January 31, 2012).