Robert Russel Tweed, of San Marino, California, a stockbroker formerly associated with CapWest Securities, Inc., and member of a California based advisory firm, Tweed Financial Services, Inc., has been named in a Complaint brought by Securities and Exchange Commission (SEC), which alleged that Tweed defrauded investors by misrepresenting the performance of an investment fund as well as the investors’ account balances. Securities and Exchange Commission v. Tweed Financial Services, Inc., et al., Case No. 2:17-cv-7251 (Oct. 2, 2017).
According to the Complaint, Athenian Fund, L.P. – a fund which pooled customer funds for investment in another fund utilizing a quantitative stock trading strategy – was created and managed by Tweed and Tweed Financial Services, Inc. in 2008. Apparently, Tweed and Tweed Financial Services, Inc. accumulated an estimated $1,700,000.00 from twenty-two investors in that regard.
The Complaint stated that while the money was initially invested as represented, the funds of investors were subsequently relocated to Quantitative Analytics Master Fund (QAMF) – an entirely different investment fund that was managed by one of Tweed’s associates. Apparently, Tweed discovered in October of 2010 that about forty percent of Athenian Fund’s QAMF investment was invested in a third-party loan rather than in equities. The Complaint alleged that Tweed was only able to recover forty-percent of the proceeds that Athenian Fund invested in QAMF, and then invested the proceeds returned from QAMF in a software business operated by one of his friends.
The SEC alleged that the software business and QAMF were both unprofitable. Specifically, the Complaint stated that Tweed discovered in 2012 that the promissory note that QAMF held was not able to be collected and was directed towards a Ghana based gold mining investment venture. Subsequently, the manager of QAMF fund was charged with committing bank fraud, and the software business filed for bankruptcy. Tweed purportedly never informed investors of Athenian Fund about the unrecoverable note or the failing software business, instead communicating in quarterly statements that the Fund’s underlying investments were performing better than it really was.
The SEC also alleged that Tweed and Tweed Financial Services, Inc. omitted from investors that their money, through the Fund, was placed in unprofitable and illiquid investments. The Fund’s assets were deemed by the SEC to be inflated during the time that some investors obtained redemptions. The Complaint alleged that Tweed and Tweed Financial Services Inc. committed violations of Advisors Act Section 206(4) and Rule 206(4)-8.
FINRA Public Disclosure reveals that Tweed has also been named in Complaint brought by Financial Industry Regulatory Authority (FINRA) alleging that Tweed made misrepresentations to customers by disseminating a bogus private placement memorandum utilized for offering and ultimately selling interests in Athenian Fund. Department of Enforcement v. Robert R. Tweed, No. 2015046631101 (Apr. 27, 2017). FINRA alleged that Tweed’s conduct was violative of Securities Act of 1933 Sections 17(a)(2) and Section 17(a)(3).
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
