Corporate & Securities Law

The Securities and Exchange Commission has charged Boulder, Colorado-based investment adviser Neal Greenberg with fraud and breach of fiduciary duty in the marketing and recommendation of his firm's hedge funds to investors, including many elderly clients.

Greenberg was the CEO of his investment advisory firm Tactical Allocation Services LLC that made investment recommendations to clients, and the head portfolio manager for his other investment advisory firm Agile Group, LLC, which managed the Agile hedge funds.

According to the SEC's order instituting administrative and cease-and-desist proceedings against Greenberg, the Agile funds held approximately $174 million of capital from more than 100 investors when Greenberg suspended redemptions in September 2008. 

The SEC's Division of Enforcement alleges that Greenberg falsely stated that the Agile hedge funds offered and managed by his two investment advisory firms were suitable for conservative investors who were retired or nearing retirement.  However, the Agile funds used leverage and concentrated in a small number of investments.  The funds suffered substantial losses in September 2008 and ceased redemptions to investors. 

"Greenberg misrepresented the diversification, risks and fees involved with investing in the Agile hedge funds to conservative investors who were dependent upon their investment income for some or all of their living expenses," according to the SEC. "Greenberg's unsuitable recommendations and misrepresentations deceived his advisory clients into believing their money was safe with him."

SNSFE has launched an investigation into Greenberg and his funds.  Those with information should feel free to contact attorneys at SNSFE.

Source: SEC Release 2010-165