The SEC alleged that the fund managers collectively raised more than $70m from investors.
SEC enforcement division director Robert Khuzami said the agency is pleased with the innovation in the capital markets, new platforms and products must obey the rules and ensure the basic fairness and disclosure that are the hallmarks of sound financial regulation.
"Fund managers must fully disclose their compensation and material conflicts of interest. Investors deserve better than the kind of undisclosed self-dealing present in these cases," Khuzami said.
In another case, the SEC charged SharesPost, an online service which provides buyers and sellers of pre-IPO stock, with engaging in securities transactions without registering as a broker-dealer.
The charges stem from the SEC’s yearlong investigation of the fast-growing business of trading pre-IPO shares on the secondary market.
The SEC alleges that Mazzola and his firms created two funds to buy securities of Facebook and other high profile technology companies and their act was an improper self-dealing. They earned clandestine commissions more than 5% disclosed in offering materials on the funds’ acquisition of Facebook stock and on re-sales of fund interests to new investors.
Konwing that the Facie Libre fund lacked ownership of certain Facebook shares, they deliberately sold Facie Libre fund interests.
SEC’s case against Mazzola, Felix Investments, and Facie Libre seeks court orders prohibiting them from engaging in securities fraud and requiring them to disgorge their ill-gotten gains and pay financial penalties.
