U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23502 / March 29, 2016
Securities and Exchange Commission v. Stanley J. Kowalewski et al., Civil Action No. 1:11-CV-56-TCB (N.D. Ga. filed Jan. 6, 2011)
Securities and Exchange Commission v. Stanley J. Kowalewski et al., No. 2:13-CR-45-RWS (N.D. Ga. filed November 19, 2013)
Former Hedge Fund Manager Sentenced to 18 Years' Imprisonment for Wire Fraud and Obstructing the SEC
On March 25, 2016, the Honorable Richard W. Story of the United States District Court for the Northern District of Georgia sentenced Stanley J. Kowalewski to 18 years' imprisonment for defrauding the investors in his hedge funds and obstructing the Commission's earlier related investigation. In February 2013, a federal grand jury in Atlanta indicted Kowalewski with wire fraud and obstruction of justice. According to the indictment, beginning in 2009, Kowalewski solicited investment money from pension funds, school endowments, hospitals, non-profit foundations, and other investors which he placed in various hedge funds that he controlled. Almost immediately after receiving the first investor money, Kowalewski began diverting the proceeds to pay for personal and business overhead expenses. In November 2015, Kowalewski was found guilty after a jury trial on 24 criminal charges, including falsely testifying in a related Commission investigation about the use of investors' funds.
The Commission filed a related civil injunctive action against Kowalewski in January 2011. In August 2012, Kowalewski was ordered to pay approximately $8.6 million in disgorgement and interest and approximately $8.4 million in civil penalties. Separately, in September 2011, the Commission barred Kowalewski from association with any broker-dealer or investment adviser.
For further information, see Litigation Release Nos. 21800 (Jan. 7, 2011) and 22073 (Aug. 29, 2011) and Investment Advisers Act of 1940 Release No. 3281 (Sept. 19, 2011).