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SEC Charges Brantley Capital Management with Securities Fraud
By Sarah N. Lynch, Of DOW JONES NEWSWIRES
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(August 19, 2009 - Wednesday) - The complaint against Brantley, former chief executive Robert Pinkas and former chief financial officer Tab Keplinger alleges they overvalued assets in an investment portfolio they managed in order to generate higher investment advisory fees.
Specifically, the SEC says Brantley, Pinkas and Keplinger substantially overstated the value of equity and debt investments in two failing private companies that represented more than half of the investment portfolio of the New York-based Brantley Capital Corporation. They also made material misstatements and failed to disclose information about the two companies to Brantley Capital's board of directors, independent auditors and investors, the SEC alleges.
"When asset values are overstated in public filings, investors are unable to make appropriate investment decisions," said Christopher Conte, the associate director in the SEC's enforcement division. "Investment advisers are required to promptly adjust the values of their assets as financial conditions dictate, and uphold their fiduciary duties to their clients."
Brantley Capital has been facing trouble at the SEC now for several years. It was delisted from Nasdaq in 2005 after its auditor refused to sign off on its 2004 financial results. Pinkas later resigned from the company. The SEC said that BCM is no longer registered with the SEC as an investment adviser.
-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@ dowjones.com.
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