On September 25, 2019, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings against Leonardo Cornide and Jorge Falcon (collectively “Respondents”) and on January 24, 2020, the Commission issued an Amended Order. In the Amended Order, the Commission found that Respondents were using investor funds to obtain personal loans and for failing to disclose their personal interest in transactions in which they used additional investor funds. The SEC's Amended Order finds that Cornide and Falcon acted as investment advisers to Premier Assurance Group, SPC, Ltd ("PSPC"), and a Cayman Islands registered insurance company. Cornide and Falcon, who own PSPC's Miami-based holding company, advised PSPC to invest up to 25% of its investment reserves in a note with Silverback Capital Partners, LLC (Silverback), which is also owned and controlled by Cornide and Falcon and which made personal loans to Cornide and Falcon of over $7 million from funds borrowed from PSPC. Additionally, the order finds that because Cornide and Falcon own PSPC's holding company and Silverback and advised PSPC, Cornide and Falcon had a conflict of interest in recommending PSCP invest in the note with Silverback. As investment advisers, Cornide and Falcon failed to comply with their fiduciary duty to their client, PSPC, including a duty to disclose all material conflicts.

The Commission ordered, and Respondent Cornide to pay $3,161,032.19 and Respondent Falcon to pay $4,904,908.27 as disgorgement, accrued interest and a civil penalty. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund was created for the disgorgement not previously paid, accrued interest and penalties. Amounts ordered to be paid as civil money penalties will be treated as penalties paid to the government for all purposes, including all tax purposes (the “Fair Fund”). See the Commission’s Order: Release No. IA-5366A.

On February 7, 2020, the Commission issued an order directing payment of certain funds received by the Commission to be paid from the Fair Fund to PSPC. Upon receipt of additional payment, pursuant to the Amended Order, the Commission will seek a Commission order to distribute such amounts received to PSPC within 30 days of receipt. See Commission’s Order: Release No. 34-88144. 

Also on February 7, 2020, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 88145. 

On April 30, 2020, the Commission issued an order directing the second payment of certain funds received by the Commission to be paid from the Fair Fund to PSPC. Upon receipt of additional payment, pursuant to the Amended Order, the Commission will seek a Commission order to distribute such amounts received to PSPC within 30 days of receipt. See Commission’s Order: Release No. 34-88777. 

On July 23, 2020, the Commission issued an order directing the third payment of certain funds received by the Commission to be paid from the Fair Fund to PSPC. See Commission’s Order: Release No. 34-89390.

On September 25, 2020, the Commission issued an order directing the fourth payment of certain funds received by the Commission to be paid from the Fair Fund to PSPC. See Commission’s Order: Release No. 34-90006.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov