SEC Charges Money Manager With Fraud
LOS ANGELES (AP) _ An investment manager who handled at least $10 million for wealthy and sophisticated clients had his assets frozen Thursday while regulators investigated what they called a massive fraud.
Benjamin Franklin Bush III and his Ben Bush Investment Management misappropriated at least $450,000 and forged statements to conceal the fact and to solicit business, the Securities and Exchange Commission contended in a lawsuit.
Bush, reached by telephone at his Pacific Palisades, Calif., offices, declined comment.
Ronald Lew, the Los Angeles federal judge who froze Bush’s assets, also ordered him to cease his fraudulent activities, SEC officials said.
In a release on the lawsuit, the SEC described Bush’s clientele as wealthy, sophisticated and nationwide. It said he accepted money to purchase investments for clients, but instead deposited the funds with his own money in a single corporate bank account that he used like a personal account.
He paid for rent, alimony, car insurance, jewelry and hockey tickets out of the account while sending the clients statements saying he had purchased their investments, the SEC said.
Ronald E. Wood, the SEC official handling the case, said Bush also induced several of his clients to purchase a highly unusual investment: Brazilian bonds issued in 1902 and 1915, a stash of which he kept in his bank safety deposit box.
The bonds have long since lapsed, ``but there’s some legislation pending in Brazil that could revive them,″ Wood said in an interview.
He said clients appear to have entrusted Bush with $10 million to $15 million, although Bush claimed to be managing far more money.
The SEC lawsuit seeks repayment of Bush’s clients and undetermined civil penalties against Bush and his firm.
Three victims were named in the complaint: MBA Partners, Collins Associates, and William Latimer.