The Financial Industry Regulatory Authority (FINRA) has expelled MICG Investment Management, LLC (MICG) of Newport News, VA, and barred Jeffrey A Martinovich, the firm’s CEO and majority owner, for securities fraud, misusing investors’ funds and causing false account statements to be issued to investors in connection with their management of a proprietary hedge fund named MICG Venture Strategies, LLC (Venture Strategies).

MICG and Martinovich organized, controlled and managed the hedge fund.

FINRA found that MICG and Martinovich improperly assigned excessive asset values to two non-public securities owned by Venture Strategies, and used the excessive asset values as the basis for paying unjustified management and incentive performance fees. Martinovich also fraudulently induced an elderly, non-accredited MICG customer to invest $75,000 in Venture Strategies.

Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, says: “MICG and Martinovich used the proprietary hedge fund to unjustly enrich themselves. This extreme abuse of trust, and their disregard for the interests of public investors, demonstrated their unfitness for participation in the industry.”

In concluding this settlement, MICG and Martinovich neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
FINRA was represented in this matter by Thomas M Huber, Senior Regional Counsel, and Jeffrey Pariser, Senior Litigation Counsel, of the Enforcement Department, under the supervision of David R. Sonnenberg, Vice President and Counsel, and John M. D’Amico, Regional Chief Counsel.