The US Securities and Exchange Commission (SEC) has charged Ohio-based hedge fund manager Anthony Davian with misappropriating about US$1 million from investors in funds managed by his company, Davian Capital Advisors.
Davian launched Davian Capital in July 2008 as an unregistered investment adviser and created LP I as a hedge fund.
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The SEC alleges that since 2011 Davian has raised over US$1.5 million from investors by promoting his company as a highly successful investment management firm.
The watchdog alleges that Davian provided investors with marketing materials by making attempts to sell the funds’ supposedly high returns and profitable trading strategies.
According to the commission, the returns and profits described by Davian in the marketing materials were fictitious.
Davian is also alleged to have misappropriated most of the money received from investors and used it for personal expenses.
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By GlobalDataCiting one example, SEC alleged that Davian forced three individuals to invest US$225,000 into his private funds and promised them that if they acted fast he would give them a break on his company’s management fees.
After receiving the investors’ proceeds on 5 July 2013, Davian used the funds to pay for the construction of his residence.
The SEC lawsuit, filed in federal district court in Akron, Ohio, seeks the return of investor funds and penalties and the court has also imposed a temporary restraining order and asset freeze at the SEC’s request.
