June 1, 2016

Maryland-based private equity firm Blackstreet Capital Management and its owner, Marry N. Gunty, will pay $3.1 million to settle charges that they engaged in brokerage activity and charged fees without registering as a broker-dealer and committed other securities law violations.  Blackstreet and Gunty performed in-house brokerage services rather than using investment banks or broker-dealers to handle the acquisition and disposition of portfolio companies for a pair of private equity funds they advise.  Blackstreet fully disclosed that it would provide brokerage services in exchange for a few, but failed to comply with the registration requirements to operate as a broker-dealer.  An SEC investigation further found that Blackstreet and Gunty engaged in conflicted transactions and inadequately disclosed fees and expenses.  SEC

Tagged in: Regulatory Violations, Securities Fraud,