SEC’s 1st Deferred Prosecution of an Individual

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SEC’s 1st Deferred Prosecution of an Individual

The SEC has used deferred prosecutions before as a way to entice companies charged with SEC violations to more fully disclose their acts or be more forthcoming and helpful during an investigation. In exchange, the SEC will delay the prosecution of those who comply. For the first time, the SEC has offered a deferred prosecution to an individual.

According to the recent SEC press release, the SEC offered a DPA to Scott Herckis, a former administrator for Heppelwhite Fund LP. The firm was founded and managed by Bert Hochfeld. The SEC charged Hochfeld in November 2012 for misappropriating from the hedge fund and overstating to investors the hedge fund’s performance.

Mr. Herchik was also an administrator for the fund until he resigned in 2012 and went to the SEC with information regarding the handling of the fund. The press release stated some of the terms of Mr. Herchik’s DPA. Accused with aiding and abetting, Mr. Herckis cannot serve as a fund administrator or provide any services for a period of five years, he must disgourge $50,000 and he also cannot associate with any broker, dealer, investment adviser, or registered investment company.

If you or someone you know has lost money as a result of an investment, please contact Richard Frankowski at 205-747-1903 to discuss your potential legal remedies.

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