On March 15, 2019, Talimco LLC, a registered investment adviser, and its former COO, Rodgers, were charged with manipulating the auction of a commercial real estate asset. One client’s asset was raided in a bid rigging scheme to sell the asset to a private affiliated client.
The asset was a commercial real estate asset sold in an alleged bidding process.
Talimco and Rogers owed its selling client a fiduciary duty to take steps to use its best efforts to maximize the price obtained for the asset. Rather than searching for competitive arms length offers, Rogers purportedly used the firm’s successful affiliated fund client for one bid, then convinced two other bidders to participate in the auction (who were actually shills who would underbid).