SEC-charged manager takes plea deal

Lawrence Penn III, recently charged by the US Securities and Exchange Commission (SEC), took a plea deal in New York State Supreme Court on Monday for stealing $9.3 million from investors, according to the New York Post.

Penn, the founder of Camelot Acquisitions Secondary Opportunities Management, admitted to grand larceny and falsifying business records in exchange for two to six years in prison. He must also make restitution of $8.3 million and relinquish his firm’s interest in the fund, the Post noted.

Justice Laura Ward offered Penn’s plea deal in spite of objections from New York Assistant District Attorney Chevon Walker, who recommended four to 12 years in prison. Penn has already served more than a year of his sentence, according to the Post.

In January 2014, the SEC charged Penn with stealing from investors, alleging that he and his acquaintance Altura Ewers charged a fund under Camelot’s management with fake fees made to a front company controlled by Ewers. Investors were told the fees were for due diligence on potential investments, but Ewers’ company Ssecurion promptly kicked the money back to companies and accounts controlled by Penn.

The SEC complaint charged Penn, two Camelot entities, Ewers, and Ssecurion with violating the antifraud, books and records, and registration application provisions of federal securities laws. The complaint required Penn and his accomplices to disgorge the ill-gotten gains with interest and pay financial penalties.

Penn allegedly used the stolen funds for credit card payments, cash withdrawals, luxurious office space, rent for two apartments, jewelry and a car.

“Penn held himself out as an ultra-sophisticated and well-connected investor in the private equity world,” said Andrew Calamari, the director of the SEC's New York regional office, in a statement last January. “Behind the scenes, Penn disregarded his obligations to the fund's investors and treated their assets as his own personal and professional slush fund.”