Thomas and Stuart Conrad Charged With Securities Fraud

On Friday, July 15, 2016, the Securities and Exchange Commission (“SEC”) charged two residents of Alpharetta, Georgia, Thomas Conrad, Jr. and his son, Stuart Conrad, and their two unregistered advisory firms, Financial Management Corporation (“FMC”) and Financial Management Corporation, S.R.L. (“FMC Uruguay”), with defrauding investors in a $10.7 million hedge fund primarily managed by Thomas Conrad. According to the SEC’s complaint, between 2010 and late 2014, Thomas Conrad directed preferential redemptions and other disbursements out of the hedge fund and its feeder funds to himself, Stuart Conrad, their extended family, and certain favored investors, while representing to other investors that redemptions were suspended.

The complaint also alleges that Thomas Conrad arranged to increase his compensation from the hedge fund by appointing himself to be a sub-manager, for a fee, and that this additional fee and the related conflict of interest was not disclosed to investors. The complaint further alleges that, in offering literature given to prospective investors, defendants touted Thomas Conrad’s significant experience in the securities industry, but failed to disclose his disciplinary history, which included an industry bar that the SEC imposed on him in 1971. Finally, the complaint alleges that, without disclosure to investors, Thomas Conrad titled certain fund assets in his name, rather than the fund’s name.

For further information about this securities law blog  post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855