Securities and Exchange Commission v. OM Investment Management LLC, Gignesh Movalia, and Edwin V. Gaw, Civil Action No. 1:13-cv -23486-Martinez (S.D. Fla., filed September, 2013)
SEC Charges Tampa-Based Adviser with Fabricating Statements and Making Unauthorized and Undisclosed Investments
The Securities and Exchange Commission recently charged a formerly SEC-registered Tampa-based investment adviser, OM Investment Management LLC, its principal, Gignesh Movalia, and its director of investments, Edwin V. Gaw, with fraudulently raising money and making material misrepresentations and omissions relating to OM Global Investment Fund, LLC, an unregistered hedge fund.
According to the SEC’s complaint, filed in U.S. District Court for the Southern District of Florida, OM Investment Management, Movalia, and Gaw made material misrepresentations and omissions concerning the fund’s holdings and investments, the identity and duties of the fund’s auditor, sub-adviser, and administrator, and failed to register the offering and sale of securities. The complaint further alleges that Movalia and OM Investment Management made material omissions concerning the fund’s entry into related party transactions, distributed fabricated account statements, misappropriated investor funds, made false statements in regulatory filings with the Commission, and failed to comply with federal securities laws and rules concerning the operation of an advisory business and an investment company.
The defendants have consented to the entry of judgments enjoining them from violating Sections 5(a), 5(c), and 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, with OM Investment Management and Movalia further consenting to be enjoined from violating Sections 203A and 207 of the Investment Advisers Act and Rule 206(4)-2 thereunder and Section 7(a) of the Investment Company Act. OM Investment Management and Movalia also consented to judgments freezing their assets, preventing the destruction of documents, and requiring them to provide an accounting to the Court. The SEC’s complaint seeks disgorgement, prejudgment interest, and civil penalties from OM Investment Management and Movalia in an amount to be determined by the Court, while Gaw has agreed to pay a civil penalty of $100,000. Separately, Movalia and Gaw consented to the entry of orders barring them from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
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