(HedgeCo.Net) The U.S. District Court for the Southern District of New York has entered a judgment against Andrew B. Scherr, the co-owner of Southport Lane Management, LLC, a now defunct New York-based private equity firm.
The SEC charged Scherr in October 2018 with aiding and abetting a fraud perpetrated by Southport Lane’s majority owner, Alexander C. Burns. According to the SEC’s complaint, from March 2013 to February 2014, Scherr acquired assets for Southport Lane that were worthless or overvalued. The complaint alleges that Scherr knew or should have known that Burns intended to and did sell the overvalued assets to the clients of his affiliated registered investment adviser, Southport Lane Advisors, LLC. Without admitting or denying the allegations in the SEC’s complaint, Scherr consented to the entry of a judgment enjoining him from violating the antifraud provisions of Sections 206(1) and (2) of the Investment Advisers Act of 1940. The judgment provides that the amount of any disgorgement and civil monetary penalties to be imposed will be determined by the court at a later date.