Investment Management
JES Global CapitalFind BBB Accredited Businesses in Investment Management.
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Government Actions
SEC ADMINISTRATIVE PROCEEDING File No. 3-20822
As of April 15, 2022:
On February 8, 2022, Elliot Smerling, managing partner of JES Global Capital GP LLC pled guilty to one count of securities fraud in
violation of Title 15, United States Code, Sections 78j(b) and 78ff and Title 17, Code of Federal
Regulations, Section 240.10b-5, and one count of bank fraud in violation of Title 18, United States
Code, Section 1344, before the United States District Court for the Southern District of New York,
in United States v. Elliot Smerling, 1:21-CR-317. The Court accepted the plea on the same day.
The superseding information to which Smerling pled guilty alleges, inter alia, that
Smerling solicited investors in the JES Fund through materially false and misleading statements
concerning the JES Fund’s audited financial statements, limited partners, capital commitments, and
holdings, and that, subsequently, with respect to additional entities, Smerling sought and obtained
approximately $140 million in collateralized loans on the basis of false and/or forged documents
provided in connection with loan application materials.
It is hereby ORDERED pursuant to Section 203(f) of the Advisers Act, that
Respondent Smerling be, and hereby is barred from association with any investment adviser,
broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally
recognized statistical rating organization.
LINK: https://www.sec.gov/litigation/admin/2022/ia-5997.pdf?utm_medium=email&utm_source=govdelivery
Important Information
Pending Government Action
As of February 8, 2022:
The United States Attorney for the Southern District of New York, announced that ELLIOT SMERLING pled guilty to a bank fraud scheme that caused the issuance of approximately $140 million in collateralized loans on the basis of forged documents, including subscription agreements from purported limited partners, audit letters attesting to his private equity firm’s finances, and falsified bank account statements. SMERLING also pled guilty to securities fraud in connection with his solicitation of investments in his private equity funds through materially false and misleading statements.
According to the allegations contained in the Superseding
Information, court filings, and statements made during the plea
proceeding:
From at least in or about January 2019 through at least in or about
March 2021, ELLIOT SMERLING, the defendant, solicited and obtained loans
totaling approximately $140 million on behalf of his private equity
funds, which were secured by purported capital commitments made by
limited partners in the funds. SMERLING obtained the loans on the basis
of falsified documents and material misrepresentations, including: (1)
a forged audit letter, purportedly prepared by an international network
of accounting, audit, tax, and professional services firms, attesting
to audited financial statements; (2) forged subscription agreements that
falsely represented, among other things, that the investment fund of a
private university based in New York, New York, and the chief investment
officer of that fund had committed $45 million, and that the investment
management division of a banking and financial services firm
headquartered in New York, New York, and the chief executive officer of
that firm had committed $40 million; and (3) falsified bank records
purporting to attest to wire transfers from purported limited partners
to Smerling’s funds.
In connection with his bank fraud scheme, from at least in or about
January 2013 through at least in or about March 2021, SMERLING also
solicited investments in his private equity funds through materially
false and misleading statements concerning the funds’ audited financial
statements, limited partners, capital commitments, and holdings.
SMERLING, 52, of Lake Worth, Florida, pled guilty to one count of
bank fraud, which carries a maximum penalty of thirty years in prison,
and one count of securities fraud, which carries a maximum penalty of
twenty years in prison. The statutory maximum sentences are prescribed
by Congress and are provided here for informational purposes only, as
SMERLING’s sentence will be determined by the judge. SMERLING’s
sentencing is scheduled for May 13, 2022 at 12:00 p.m. before Judge
Cote.
LINK: https://www.justice.gov/usao-sdny/pr/ceo-private-equity-fund-pleads-guilty-scheme-defraud-banks-140-million
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