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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23661 / September 29, 2016

Securities and Exchange Commission v. Nicholas S. Savva, Civil Action No. 16-CV-5432 (E.D.N.Y. filed September 29, 2016)

SEC Files Fraud Charges Against Brooklyn-Based Investment Adviser

The Securities and Exchange Commission today announced settled charges against Nicholas S. Savva, a New York City resident, with defrauding 12 investors in connection with his hedge fund, Five Star Capital Fund, LP.

In a complaint filed in the U.S. District Court for the Eastern District of New York, the SEC alleges that from May 2015 through February 2016, Savva, a former registered representative who was statutorily disqualified by FINRA from association with its member firms, made false and misleading statements while soliciting approximately $1.4 million from 12 investors in Savva's hedge fund, Five Star. While soliciting investments, Savva lied to his investors about: (i) the management of Five Star; (ii) Savva's true industry experience; and (iii) Five Star's historic investment performance. While operating Five Star, Savva misappropriated $38,719.98 from Five Star for purely personal expenses, including, among other things, lodging during an international vacation, home improvement expenditures, and cash withdrawals. During the period when Savva was acting as a corrupt investment adviser and stealing money from Five Star, Savva also collected $19,600 in fees for managing Five Star's investments.

The SEC's complaint charges Savva with violating 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 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Without admitting or denying the allegations in the SEC's complaint, Savva consented to the entry of a final judgment permanently enjoining him from violating those provisions of the federal securities laws. In addition, Savva has agreed to pay disgorgement of $58,319.98 plus prejudgment interest of $388.80, and $160,000 in civil penalties against him. The settlement is subject to court approval.

The SEC's investigation was conducted by Gerald Gross, James Hanson and Haimavathi Marlier, and was supervised by Sanjay Wadhwa, all of the SEC's New York office.

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2016/lr23661.htm


Modified: 09/29/2016