Greensboro Firm Charged with $65 Million Fraud on Pension Funds, School Endowments, Hospitals and Non-Profits
According to an article in Investment News, SJK Investment Management, LLC out of Greensboro, NC and its CEO, Stanley Kowalewski, have been charged with defrauding pension funds, school endowments, hospitals and non-profit foundations out of as much as $65 million.
The U.S. Securities and Exchange Commission (SEC) alleged that Kowalewski used the $65 million he raised since the summer of 2009 as if it were his own personal bank account. He took $4 million as a “salary draw or administration fee” and used another $3.9 million to purchase a vacation home on Pawley’s Island, SC, in addition to other expenses pegged as “startup costs” for the two hedge funds that were marketed to investors. William Hicks, Associate Regional Director for the SEC’s Atlanta office said, “he breached his responsibilities as an investment adviser in the worst manner possible.”
A U.S. District Court for the Northern District of Georgia froze the assets of the firm and Mr. Kowalewski on January 6, 2011. The SEC is attempting to bar him from the securities industry and recover the lost investor money, in addition to interest and penalties.