New York law firm Anderson Kill & Olick has filed a class action lawsuit on behalf of individuals and entities that invested with the investment firm of Westgate Capital Management
New York law firm Anderson Kill & Olick has filed a class action lawsuit on behalf of individuals and entities that invested with the investment firm of Westgate Capital Management between 1 January 2004 and 2 March this year.
The complaint charges Westgate and certain of its officers and directors, including James M. Nicholson, with violations of Section 10(b) of the Securities Exchange Act of 1934 and various other torts for issuing materially false and inaccurate financial statements and other information to the investing public.
For instance, Westgate represented that it managed assets ranging from USD600m to USD900m, that it used prime brokers for custody of fund assets and that its financial statements were audited by independent certified public accountants.
However, the complaint alleges that Westgate had no more than USD100munder its management, failed to use independent auditors and failed to place fund assets with custodians.
On 25 February 2009, the SEC filed a complaint against Westgate and Nicholson charging them with operating a large-scale scheme that defrauded hundreds of investors of millions of dollars by providing them with misleading marketing materials that overstated investment returns and by misrepresenting the value of the assets under management.
Additionally, the SEC sought a court order freezing Westgate and Nicholson’s assets. Moreover, on 25 February 2009, the FBI announced that Nicholson had been arrested on charges of securities and bank fraud based upon these same allegations.
