Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

SEC Sues Investment Adviser


A district court judge in Connecticut issued an emergency order earlier this month freezing the assets of Ian Renert and Hawthorne Sterling & Company, an unregistered investment adviser in Wilton, Conn., according to the SEC.

The Securities and Exchange Commission subsequently filed a formal complaint alleging that Renert, the owner and controller of Hawthorne, organized a fraudulent offering of $22 million in unregistered offshore mutual funds, according to the SEC. Based on an SEC motion, Judge Peter Dorsey of the United States District Court in New Haven, Conn. froze the assets and ordered expedited discovery, the SEC said.

From June 1997 to June 2000, more than 700 investors in the U.S. and more than 100 overseas investors purchased shares in 30 entities called the Hawthorne Sterling Family of Funds, according to the SEC. Renert misrepresented that the funds would invest in bank debentures, which in reality were fake prime bank instruments, according to the SEC. The SEC complaint also alleges that Renert and Hawthorne failed to disclose that Renert used fund assets for day trading in Internet stocks, losing at least $2.2 million and to fund a mortgage on one of his homes.

On Hawthorne's website, which describes the company as a financial publisher and offers offshore hedge funds called the Equivest Premier Holdings, Renert is quoted as saying, "Why wish for the moon and the stars when stocks and bonds are so easily converted to cash." Renert could not be reached for comment.