Registered Investment Adviser Charged with Fraud in Bid Rigging by SEC. Penalty of $325,000 against Advisor.

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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).

The rigging of the process caused Talimco’s private fund client to be the highest bidder. Tamlico’s private fund then re-sold the asset at a profit. Talimco and Rogers’s rigging of the auction deprived the selling client of his right to an arm’s length auction and highest possible price.

“By rigging the auction, Talimco and Rogers failed to fulfill their fiduciary duty to their client,” as stated by the SEC.

The settled orders stated that Talimco and Rogers violated Section 206(2) of the Investment Advisers Act. Talimco consented to a cease-and-desist order, a censure, disgorgement of its fees of $74,000 plus prejudgment interest of $8,758.80 and a penalty of $325,000. Rogers consented to a cease-and-desist order, a 12-month industry suspension, and a $65,000 fine.

Anthony M. Abraham, Esq., PC, has represented many investors who have claimed against Bankrupt and other estates for return of assets taken through fraud, including claims against Registered Investment Advisors. Anthony M. Abraham, Esq., PC is experienced in churning and unauthorized trading claims. If you were victimized and need help, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@AbrahamAttorneys.com.