The SEC said in its complaint that Brian Raymond Callahan of Old Westbury, New YorK raised over $74m from two dozen investors since 2005.
SEC division of enforcement associate director Antonia Chion said Callahan misled investors with false promises, and enriched himself at their expense when he diverted fund assets for his personal use and pocketed inflated management fees.
The accused promised the investors that their fund will be invested in liquid assets, but diverted the fund to his brother-in-law’s beach resort project that was likely to shutdown.
Callahan also used investor money to pay other investors and make a down payment on the $3.35m unit.
SEC said that Callahan operated the five funds through his investment advisory firms Horizon Global Advisors and Horizon Global Advisors and used the promissory notes to hide his fraud over investor funds.
Callahan has also been accused for not disclosing the information to investors in 2009, the Financial Regulatory Industry Authority barred him from associating with any FINRA member.
SEC has sought for preliminary and permanent injunctions against Callahan and his firms, return of ill-gotten gains with interest, and financial penalties.
The probe has been conducted by Holly Pal, Linda French, Osman Handoo, Ann Rosenfield, Natalie Lentz and Lisa Deitch of the SEC’s Division of Enforcement.
