Investment Adviser and Unregistered Firm Caught Stealing Investor Funds

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On February 2, 2017, the SEC charged Sentinel Growth Fund Management, a Connecticut-based investment advisory business, and its owner with stealing investor money to settle a private lawsuit among other expenditures.

Per the SEC order, Sentinel Growth Fund Management and its founder, Mark Varacchi, stole roughly $3.95 million from investors.  Varacchi told investors that their money would be given to hedge fund managers for investment purposes. However, instead of transferring all of the money, Varacchi and his firm commingled investor assets and manipulated accounts and investment returns.  In doing so, they were able to siphon investor funds that they then used for personal use, including settling a private lawsuit against Varacchi by his prior employer.

In addition to the aforementioned misconduct, Sentinel Growth Fund Management was not registered with the SEC nor with any state to do business as an investment adviser.  This alone should have been a red flag.  As a precaution, investors should always research the background of individuals and firms before investing with them.  Background checks help investors learn important information about the firm and its professionals providing such services, which includes licensing data, registration status, and disciplinary history.

If you would like to know more about the individuals or firms selling you investments, you can contact the SEC’s Office of Investor Education and Advocacy by calling (800) 732-0330.  You can also go to Investor.gov, a free online database that enables you to search for your investment professional.

For more information on this and other securities law questions, contact Jacko Law Group, PC at (619) 298-2880, or email info@jackolg.com.  Thank you.

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