U.S. securities regulators on Tuesday accused a small Westchester County, N.Y., company of acting as an unregistered investment adviser that managed billions in hedge fund and private equity investments for Russian oligarch Roman Abramovich.
The Securities and Exchange Commission said in a lawsuit filed in federal court in New York that Concord Management and its owner, Michael Matlin, had earned millions of dollars in fees for providing investment advice to a man identified only as a “wealthy former Russian.” Was done as. “The official is widely believed to have political ties to the Russian Federation.”
A person familiar with the matter confirmed the man was Mr Abramovich, who was governor of the Chukotka region in eastern Russia.
The New York Times reported in March 2022 that Concord, with an office in Tarrytown, NY, had managed dozens of investments for Mr. Abramovich. A few weeks ago, Russia invaded Ukraine, and international officials began issuing sanctions against Russian oligarchs close to President Vladimir V. Putin. The United States never imposed sanctions on Mr. Abramovich, but Britain and the European Union did.
Sanctions forced Mr Abramovich to sell Chelsea Football Club, London’s famous football team. Authorities also seized more than $13 billion in assets held by financial institutions in Britain, the Cayman Islands, the Isle of Jersey and the British Virgin Islands. It is believed that some of those assets were investments that Concorde made for Mr Abramovich with US financial firms that managed offshore funds.
In June last year, the United States seized two jet planes owned by Mr Abramovich.
The SEC’s complaint covers activity that began in 2012, when the regulator said the firm and Mr. Matlin, now 59, should have registered as investment advisers. Over the next decade, the firm and Mr. Matlin took $85 million in compensation, the regulator said.
The complaint details allegations of how Mr. Matlin and Concord coordinated investment decisions with companies based in the British Virgin Islands and Jersey that are believed to be controlled by Mr. Abramovich. The SEC said the daisy chain of offshore entities was one way Concorde kept Mr Abramovich’s involvement in the background.
Gurbir S., Director of the SEC’s Enforcement Division. Grewal said in a statement that Concordance “undermines the Commission’s ability to exercise effective regulatory oversight over its clients’ billions of dollars invested in the United States.”
John Hammond, a spokesman for Concord and Mr. Matlin, said in a statement: “We are confident that a full and fair review of the applicable law and relevant facts will outline that Concord management and Michael Matlin have complied with all regulatory and legal requirements. ,
A lawyer for Mr. Abramovich did not respond to a request for comment.
The Times reported nearly a year ago that the SEC’s Boston office had opened an investigation into Concord. The investigation began as some in Congress pressed to close a regulatory loophole that has allowed hedge funds and private equity firms, in some cases, to avoid having to undergo the same anti-money-laundering investigations Which banks and mutual funds have to do regularly.
The SEC said that as of January 2022, Concorde managed 112 hedge fund and private equity investments worth $7.2 billion. The regulator said the oligarch was the company’s only customer.
The SEC said Mr. Matlin instructed Concord employees to liquidate investments at a time when Russia was threatening to invade Ukraine. The agency said it asked analysts to determine which investments could be cashed out early from hedge funds or sold to other investors in private transactions.