Unregistered Fund Manager Did The Work Of At Least Four Men (That He Made Up)

And one woman!

Say what you will about Steven Zoernack-- that his pitch for EquityStar Capital Management was based on lies, that he stole from investors, that he covered up his criminal past, that he answered to the name Mandy during meetings with big fish--, the guy worked his a$$ off.

The SEC’s Enforcement Division alleges in an administrative proceeding against Zoernack and his firm EquityStar Capital Management: Zoernack secretly made more than $1 million in unauthorized withdrawals from the funds’ accounts without informing investors. Zoernack and EquityStar took extensive measures to hide Zoernack’s background that included two felony fraud convictions, a bankruptcy filing, and other money judgments and liens against him. Zoernack even hired a firm to manipulate search results on his name by flooding the Internet with misleading information indicating he was a successful fund manager, investor, and philanthropist. This made it harder for investors to discover Zoernack’s criminal convictions and other negative information in Internet searches. Zoernack used at least three false identities while communicating with investors to make Equity Star sound like more than a one-man operation. For example, he created a nonexistent woman named Amanda Sutton who carried the title: Investor Relations Professional.

SEC Announces Charges Against Unregistered Fund Manager Accused of Hiding Criminal Past [SEC via Jeffrey Cane]


Four Years After Shuttering Fund, Long Island Asset Manager/Hooters Franchise Owner/Frederick's Of Hollywood Devotee Not Ready To Part With Investor Money Just Yet

In 2008, Fursa Strategic Alternatives, an asset management firm run by Massapequa resident William F. Harley III, informed investors that it would be closing its doors and returning everyone's money. As some money managers can likely attest though, making the decision to close up shop (and writing people to say as much), doesn't mean you're emotionally ready to do so. Harley, for example, couldn't shake the feeling that he was put on this earth to be an investor and, god damn it, he was going to invest until the day he died. So he did what any rational human being in his position would, and decided to just, you know, hang on to his clients' money for a while. Of course, the pesky little varmints kept calling, so he had to disconnect the phones and to avoid an awkward confrontation wherein they appeared at the firm's building demanding their cash in person, he moved HQ into the basement of one of his other businesses, a Hooters restaurant. That got people off his tail for a while but, unfortunately, they popped up again and this time are taking legal action. The Claude Worthington Benedum Foundation filed the lawsuit last month in the Court of Common Pleas in Allegheny County, Pa. It has since been moved to federal court in the western district of Pennsylvania. The charity said in its lawsuit that William F. Harley III continued operating Fursa Strategic Alternatives from the basement of a Hooters restaurant on Long Island after saying in 2008 the fund would close and the charity's money would be returned. Federal filings show Fursa in January was the largest investor in lingerie company Frederick's of Hollywood Group. A spokesman for Harley said lawyers for the fund sought unsuccessfully to contact the charity last year. Harley could not be reached for comment at his home Wednesday...The lawsuit points to Fursa's investment in Frederick's of Hollywood as evidence the company continued operating instead of returning its money. Fursa Alternative Strategies owns 46 percent of Frederick's, according to the company's proxy statement. While a spokesman for Harley has not denied most of the allegations, he does take issue with claim that Fursa has any sort of legitimate set-up at any of his four Hooters, telling Newsday that he "occasionally has business meetings at them, but doesn't run an office there." Charity lawsuit accuses Massapequa man of mishandling $2M investment [Newsday]