Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Feds sue Utah hedge fund owner
SEC » Separately, regulators also take actions against two other Utah businessmen.
First Published May 02 2012 04:45 pm • Last Updated May 03 2012 03:00 pm

Federal regulators are suing a Utah hedge fund owner over allegations he artificially inflated assets and charged excessive fees.

Russell K. Cannon, 38, of North Salt Lake, is one of three Utahns who have been named in recent actions by the Securities and Exchange Commission.

Join the Discussion
Post a Comment

The SEC sued Cannon over allegations he fraudulently inflated a stock held by his RKC Matador Funds through trades in the last minutes of the final day of the month and by dictating the price the stock was listed at on Matador’s financial reports to clients.

"We disagree with the charges, and we’re going to resist [them] in the complaint," Michael Coombs, Cannon’s attorney, said Wednesday.

Cannon told Matador investors that he used a five-step process to evaluate shares through two of his fund management companies, RKC Capital and RKC Capital Management, before buying. But instead of using that strategy, most of Matador’s assets were invested in a company called Global Pari-Mutuel Investments Inc., according to the lawsuit filed Monday. Cannon’s father was one of three board members of Global, whose shares made up more than 50 percent of Matador’s assets.

Cannon, whose incentive pay depended on Matador’s performance, then used last-minute trading on the last day of the month to inflate Global’s share price, the SEC says. When that didn’t work well enough, Cannon allegedly provided a false share price in Matador’s monthly brokerage statements.

The SEC asks that Cannon be ordered to halt the allegedly fraudulent activities, pay a fine and disgorge profits.

In other recent SEC actions

» The agency has started administrative proceedings against Brian J. Smart, 35, of Lehi, owner of Smart Assets LLC. Smart and his company last year were found to have violated federal securities laws, fined $2 million and ordered to disgorge $2.6 million of profits.


story continues below
story continues below

A federal court had found that Smart and Smart Assets misappropriated more than $2 million from investors through a "systematic program of deception and fraud," the SEC said.

Instead of placing investors’ money in safe investments as he claimed, Smart used it for personal expenses, invested in risky real estate ventures and hard money loans, and to pay "dividends" to other investors, the agency said.

» The SEC said a Salt Lake City attorney "played a significant role" in a so-called pump-and-dump scheme in Florida that was aimed at taking advantage of the demand for temporary housing after the 2010 earthquake in Haiti.

The SEC sued attorney David Rees as part of its lawsuit against a company called Recycle Tech and six other people.

The suit filed Wednesday in Miami alleges Rees aided in a scheme to inflate the price of Recycle Tech shares and sell them for a profit by preparing legal documents and a false legal opinion letter in return for some of the shares.

The SEC is asking for an order barring Rees from providing legal services to any person in connection with the offer or sale of securities.

Rees did not return an email seeking comment.

tharvey@sltrib.com

Twitter: TomHarveySltrib



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Login to the Electronic Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.