The SEC charged Brendan E. Murray (“Murray”), while associated with Cornerstone Equity Advisors, Inc. (“Cornerstone Advisors”), with being engaged in a fraudulent billing scheme bilking funds from Cornerstone Funds, a family of mutual funds registered with the SEC as investment companies and advisory clients of Cornerstone Advisors. According to the SEC, as Cornerstone Funds headed for liquidation and eventual bankruptcy, Murray and another person associated with Cornerstone Advisors began submitting doctored vendor invoices to the Funds requesting payment for certain vendor services that were never provided or were inflated from the actual amounts due. When Cornerstone Funds remitted payment to Voyager Institutional Services, LLC (which paid the vendors) the SEC alleged that Murray and the associate fraudulently skimmed a portion of these payments for their personal gain.

The Initial Decision concluded that Murray, for his role in the fraud, willfully aided and abetted and caused Cornerstone Advisors to violate Section 206 of the Advisers Act and that Murray also willfully violated Section 37 of the 1940 Act.

Please click www.sec.gov/litigation/aljdec/2007/id635jtk.pdf for a copy of the administrative order.