SEC Settles Fraud Charges with Two Former Executives of TCA Fund Management Group Corp.

ADMINISTRATIVE PROCEEDING
File No. 3-20057

September 24, 2020 - The Securities and Exchange Commission today announced settled administrative actions against Michael Vernon, the former Chief Operating Officer of registered investment advisory firm TCA Fund Management Group Corp. ("TCA"), and Steven Rosen, its former Chief Financial Officer, for their roles in the firm's fraudulent inflation of net asset values and performance results of several funds it managed.

According to the SEC's order, Vernon and Rosen both played a key role in TCA's fraudulent scheme by assisting in the recording of false data on the funds' books and records which resulted in inflated monthly net asset values and performance figures. TCA distributed promotional materials to the funds' current and prospective investors that included the inflated asset values and false performance.

The SEC's orders find that Vernon and Rosen each violated the antifraud provisions of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, and Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Without admitting or denying these findings, Vernon and Rosen each consented to a cease-and-desist order, a payment of a penalty of $35,000, and a limitation on activities from serving as a director or officer of any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with a right to apply to act in such capacity after three years. In addition, Rosen agreed to an order that denies him the privilege of appearing or practicing before the Commission as an accountant, with a right to re-apply after three years.

The SEC previously charged TCA and another affiliated company, TCA Global Credit Fund GP Ltd., with fraud on May 11, 2020, and obtained the appointment of a receiver over those entities and the TCA funds.

The SEC's ongoing investigation into this matter is being conducted by Shan Chang and Raynette R. Nicoleau, under the supervision of Chedly C. Dumornay and Glenn S. Gordon of the Miami Regional Office.