The Securities and Exchange Commission on Monday stated it has actually settled a case versus Michael Rothenberg, a San Francisco investor the firm states misused countless dollars of financiers’ cash in a “fraudulent scheme.”
Rothenberg, 34, overcharged individuals purchasing his funds, utilizing the extra money for his own jobs, consisting of a virtual truth production business, the SEC stated in the problem ( PDF). The cash was likewise utilized to spend for expensive functions and celebrations, the firm stated.
“Rothenberg and his firm misappropriated millions of dollars from the funds, including an estimated $7 million of excess fees, which Rothenberg used to support personal business ventures he claimed were self-funded and to pay for private parties and events at high-end resorts and Bay Area sporting arenas,” the SEC stated in a declaration. See listed below for a copy of the problem.
Contacted by phone, Rothenberg didn’t confess or reject the claims. He decreased more remark.
However, in different legal action Monday,, declaring that the bank’s mishandling of a $4.25 million transfer made it appear like Rothenberg embezzled funds. The bank rejects the allegation.
Rothenberg established Rothenberg Ventures at age 28 and drew attention with effective financial investments in business like Elon Musk’s SpaceX and financial investment appRobinhood Two years back, nevertheless, Rothenberg Ventures dealt with allegations of misbehavior and a series of staff member departures.
According to the regards to the settlement, Rothenberg will be “barred from the brokerage and investment advisory business with a right to reapply after five years,” the SEC stated. Other terms still require to be authorized by the United States District Court, which will identify if Rothenberg Ventures will need to pay civil charges.
“Venture capital investors provide important funding for startups but there are risks, including potential harm to investors from unscrupulous managers who defraud them, as we allege Rothenberg did in this case,” stated C. Dabney O’Riordan, co-chief of the Enforcement Division’s Asset Management Unit at the SEC.
First releasedAug 20, 1: 35 p.m. PT
Update,Aug 21 at 9: 55 a.m.: Adds background from Rothenberg match versus Silicon Valley Bank and consists of SEC’s problem.
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