Jeffrey Pederson PC is interested in speaking to investors of Robert “Rusty” Tweed as part of an investigation into the broker. Tweed was previously with Cabot Lodge, Concorde Investment Services, and MAM Securities. Please call 1-866-817-0201 for a free and private consultation with an attorney. Many issues which may entitle investors to recovery against Tweed’s former employers, have been brought to light by a recent FINRA complaint against Rusty Tweed. However, time is running on the ability to recover.
FINRA alleges in a complaint that between November 2009 and March 2010, Rusty Tweed obtained more than $ 1.6 million from his retail customers through a false and misleading private placement memorandum (“PPM”) he used to offer and sell interests in his Athenian Fund LP, a pooled investment fund that he both created and controlled.
Tweed drafted and circulated the private placement memo (PPM), a document that is supposed to provide investors with significant information to evaluate the investment, that misrepresented and failed to disclose material information to investors, and twenty three customers invested in the Fund without the benefit of complete and accurate information.
The misrepresentations included: (1) the total potential fees and costs associated with the Fund; (2) Tweed himself; and (3) the entities and individual who would ultimately have immediate control over the money that customers invested.
According to the Complaint, Tweed and the PPM misrepresented or failed to disclose to retail customers the following material facts:
a. First. Tweed and the PPM misrepresented the total potential costs of an investment in the Athenian Fund. opting to disclose certain costs and fees while oniitting others that would reduce any return on investment.
b. Second, Tweed and the PPM also failed to disclose that the omitted fees and costs were added only after Tweed discovered that arbitration (complaints) against him would prohibit him from opening a trading account for the Fund directly and require the use of a more expensive master fund structure.
c. Third, Tweed and the PPM failed to disclose that Tweed had replaced the Fund’s identified master fund with another entity controlled by an undisclosed person (ER). who would now have immediate control over the Fund’s assets. Tweed and the PPM likewise provided no information sufficient for investors to evaluate the risk ofentrusting their capital to ER and his company, such as relevant background. other business activities, and qualifications.
d. Fourth, Tweed and the PPM failed to disclose the additional management fees and perforniance allocations that arose when he granted control to ER and his management company, and Tweed’s own interest in those fees, which would further reduce any return on the retail investors’ capital.
As a result of these material misrepresentations and omissions. Athenian Fund investors could not evaluate the true costs and risks associated with the Fund, including those relating to the individual or the entities with immediate control over their capital.