Federal regulators have filed civil fraud charges against prominent Wall Street executive Lynn Tilton and her investment firms. They are accused of concealing the poor performance of fund assets linked to risky securities.
The Securities and Exchange Commission announced the lawsuit Monday against Tilton and her Patriarch Partners group of investment firms, based in New York. The SEC said Tilton and the firms have misled investors and wrongly collected nearly $200 million in fees and other payments.
The agency said Tilton violated her fiduciary duty to clients, the legal obligation of investment advisers and managers to put their clients’ financial interests first.
An attorney representing Tilton and Patriarch Partners did not immediately return a telephone call seeking comment.
The SEC said the alleged fraud goes back to 2003. It said Tilton and her companies provided investors with “false and misleading information” and engaged “in a deceptive scheme, practice and course of business, relating to the values they reported for these funds’ assets.”
Tilton told the Wall Street Journal on Monday she is “choosing to fight. My reputation is very important to me and my companies. When my integrity or my intent are questioned, I fight back and let truth prevail.”
One of the poorly performing “portfolio” companies in the Patriarch-controlled investment funds known as Zohar was Moncks Corner-based emergency vehicle maker American LaFrance, which failed in early 2014.