Injunction In Rye Brook Private Equity Manager Fraud Case: NY AG

Rye NY

10 February, 2020

12:49 PM

Description

RYE BROOK, NY — Saying she needs to protect investors in a private equity fund based in Westchester County, New York Attorney General Letitia James announced Monday that her office has obtained an injunction preventing private equity manager Laurence G. Allen from making any decisions about ACP, a fund he launched in 2004. The AG's office alleges that Allen misappropriated money from ACP, misappropriating money to enrich himself and his companies even after the investigation began. Prosecutors allege he illegally converted more than $13 million of investors' money from ACP, located in Rye Brook, New York, mostly into another company he owned to pay its business expenses and his salary. The AG's office filed suit against Allen in December, and it goes to trial in June. SEE: AG Files Lawsuit Against Private Equity Fund Manager. Meanwhile, Justice Barry R. Ostrager of the New York State Supreme Court has enjoined Allen and corporate entities he controls from making any decisions with respect to the remaining assets of ACP. Ostranger wrote that the evidence produced by the Office of the Attorney General "revealed a shocking level of self-dealing, breaches of fiduciary duty, misappropriation of enormous sums of ACP capital, and outright fraud," the AG's office announced. "This order makes clear that no New Yorker should be investing a penny with ACP, these entities, or any business run by this individual," James said. "We are gratified that after hearing the evidence the court concluded that the only reasonable outcome was to deny defendants access to the remaining investor assets." The court found that ACP "was essentially utilized as a piggy bank to fund a failing broker-dealer, its failing parent, and Mr. Allen," according to the AG's announcement.