12.14.2009 The SEC issued an order against Stephen Jay Mermelstein, finding that Mermelstein, the former Chief Operating Officer of a formerly registered investment adviser, Ark Asset Management, Co., Inc., failed reasonably to supervise a portfolio manager who engaged in fraudulent trade allocation practices during the years 2000 through 2003. As a result of this fraudulent conduct, Ark realized at least $19 million of ill-gotten gains. The Order suspends Mermelstein from association in a supervisory capacity with any investment adviser for a period of six months and orders Mermelstein to pay a civil penalty of $50,000.
Click http://www.sec.gov/litigation/admin/2009/ia-2961.pdf to access the order. Click http://www.sec.gov/litigation/admin/2009/ia-2962.pdf to access the order against Ark Asset Management Co., Inc., for the same $19 million in ill-gotten gains, among other things.