Securities and Exchange Commission Announces Filing of Injunctive Action Against Investment Advisers RKC Capital Management, LLC, RCK Capital LLC, and Russell K. Cannon.

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The Securities and Exchange Commission (“SEC”) announced today that it has filed an action in the United States District Court of Utah against several investment advisers and an individual.  The SEC’s complaint purportedly alleges that Defendants RKC Capital Management, LLC, RKC Capital LLC, and Russell K. Cannon artificially inflated the assets of a hedge fund they managed called RKC Matador LLC (“Matador”) in a scheme to defraud Matador investors.

From 2007 to 2011, Defendants are alleged to have overstated the assets under management at Matador by “marking the close” of Matador’s largest stock holding Global Pari Mutuel Services, Inc.  According to the SEC, marking the close is a manipulative trading practice designed to cause the price of the stock to rise at the close of the market.  Defendants also allegedly inflated Matador’s assets under management by instructing Matador’s fund administrator to record a price of Matador’s holdings in Global above the actual market price for around 15 months.  The SEC announced that, at its peak, Matador’s assets under management were overstated by 100% and its performance data returns were overstated for several months.

KKBS is investigating these allegations and is interested in speaking to investors.  For more information or to discuss this issue, contact Vincent D. Slavens at vslavens@kkbs-law.com.