SEC Says Long Island Adviser Stole Over $1 Million

The U.S. Securities and Exchange Commission (SEC) has announced that it has filed charges Corey Ribotsky, a 40 year old unregistered Long Island investment adviser, for stealing over $1 million from one of his hedge funds, according to Investment News. He apparently lied about the performance of his strategies and hid the truth from his investors, while he was stealing their money. The assurances were made to investors during the 2007 and 2009 time frame that he could liquidate the PIPE investments over a three or four year period, which according to the SEC complaint was not possible. Since the AJW Funds were investing in convertible debentures of distressed microcap companies they were entitled to get billions of shares of companies with very thin trading volume, making it impossible to sell the shares in the open market. In 2007, when the investments failed to generate enough money to pay requested withdrawals, Ribotsky used other investors' money to pay the redemptions.

Ribotsky's firm, The NIR Group, had some $876 million under management invested in four hedge funds, which were invested in private investments in public equities, or PIPES. During the years 2004 and 2009, Ribotsky took out more than $1 million from the AJW Qualified Partners LLC Fund. Naturally, as in nearly every case of misappropriation, he used the money to provide a lifestyle of luxury. According to the article, the stolen money was used to buy a $15,750 Rolex, make car payments of $24,681 for luxury vehicles, such as Lexus and Mercedes, and to buy other luxury purchases.

As is typical in these cases, the SEC is seeking an injunction against Ribotsky and his firm, as well as monetary fines and disgorgement of profits and interest.

Contact Us
Free Consultation: (800) 259-9010