Miami firm to pay $3.1 mln to settle SEC probe

The Securities and Exchange Commission said a Miami-based hedge fund advisory firm and several executives agreed to pay more than $3.1 million in total disgorgement and penalties to settle charges that they had deceived investors about whether fund managers had invested in a Latin America-focused hedge fund.

According to the SEC, Quantek Asset Management LLC from 2006 to 2008 made misrepresentations about fund managers having "skin in the game" along with investors in the $1 billion Quantek Opportunity Fund. Quantek also was accused of misleading investors about the investment processes of its funds as well as some related transactions involving its lead executive Javier Guerra and former parent firm Bulltick Capital Markets Holdings LP. Bulltick, Guerra, and former Quantek operations director Ralph Patino also faced SEC charges and were included in the settlement accord.

The defendants settled the charges without admitting or denying the findings.

Quantek and Guerra agreed jointly to pay more than $2.2 million in disgorgement and prejudgment interest, as well as individual penalties of $375,000 and $150,000, respectively. Meanwhile, Bulltick and Patino agreed to penalties of $300,000 and $50,000, respectively. Guerra consented to a five-year bar from the securities industry, while Patino consented to a securities industry bar of one year. Quantek and Bulltick also agreed to censures.

In a statement Guerra said that the fund's related party transactions didn't negatively affect financial performance of the fund and were permitted according to the funds offering documents. The alternative investment fund's portfolio includes asset-backed lending investment activities in a number of sectors, the statement said.

Quantek liquidated during the global financial crisis with the backing of 80% of investors, according to the statement. Guerra resigned in October 2011 after helping return more than $260 million to investors, the statement said.

In a separate statement, Bulltick said that none of its current employees were found to have violated securities laws and that the SEC order didn't contain findings that Bulltick itself made misrepresentations to investors. Bulltick also stated that in January 2009 it separated from Quantek, the former subsidiary that was the focus of the SEC investigation.

Patino's defense counsel, Stanley Wakshlag at Kenny Nachwalter PA in Miami, said he and Patino were glad to have put the matter behind them.