The New York investment adviser, Brian Raymond Callahan, of Old Westbury is charged with raising more than US$74 million from at least two dozen investors since 2005, promising them that their money would be invested in liquid assets.
Callahan had also used the investors’ funds to pay other investors and to make a down payment on the US$3.35 million unit he purchased at his brother-in-law’s real estate project, the SEC alleged.
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Callahan operated the five funds through his investment advisory firms, Horizon Global Advisors Ltd., and Horizon Global Advisors, LLC, and used the promissory notes to hide his misuse of investor funds, the complaint further alleged.
Further, the promissory notes overstated the amount of money diverted to the real estate project. The inflated promissory notes allowed Callahan to overstate the amount of assets he was managing, and inflate his management fees by 800% or more.
The SEC alleged Callahan with refusing to testify in the SEC’s investigation and having recently informed investors about the investigation by giving false assurances that no laws had been broken.
Callahan also misled investors by not disclosing that in 2009, the Financial Regulatory Industry Authority barred him from associating with any FINRA member, the SEC alleged.
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By GlobalDataThe SEC is seeking preliminary and permanent injunctions against Callahan and his firms, return of ill-gotten gains, with interest, and civil penalties
At the SEC’s request, and after a court hearing on March 5, 2012, the court has granted a temporary restraining order freezing the assets of Callahan and his advisory firms, enjoining them from violating the antifraud provisions and granting other emergency relief.
