Today, jurors in New Haven, Connecticut, federal court returned a verdict in the Securities and Exchange Commission’s favor against an investment adviser and its owner.
The jury found that Westport Capital Markets, LLC, a Connecticut-based investment advisory firm, and its owner, Christopher E. McClure, defrauded their advisory clients by repeatedly purchasing securities that generated significant undisclosed compensation, enriching themselves at their clients’ expense. The court previously granted a partial summary judgment, holding that, in violation of 206(2) and 206(3) of the Investment Advisers Act, Westport Capital and McClure failed to disclose their conflicts of interest and that Westport Capital made, and McClure aided and abetted, unauthorized principal transactions. The court reserved for trial whether defendants acted intentionally, knowingly, or recklessly under the antifraud provisions of Section 206(1) of the Advisers Act, and whether defendants acted willfully under the antifraud provisions of Advisers Act Section 207. Today, jurors returned a verdict in the SEC’s favor on these counts.