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SEC Bars Ex-COO for Alleged Misuse of Client Funds

August 6, 2018

The SEC has barred a former chief operating officer of a California-based investment advice firm for his alleged role in misusing and then losing client funds, InvestmentNews writes.

From 2010 to May 2014, Gilbert Fluetsch served as COO of the Hoplon Financial Group, according to the publication. Fluetsch allegedly helped the firm’s owner set up a fund that pooled investor money to flip residential real estate, the SEC says, according to InvestmentNews.

From 2011 to 2014, Hoplon and its owner, Daniel Vazquez Sr., allegedly raised $2.18 million from 27 investors, mostly from retirement accounts, for membership units in the fund, according to a January 2018 SEC complaint cited by the publication.

Fluetsch then helped the firm and Vasquez misuse the funds for personal expenses and unrelated business expenses, according to the complaint, InvestmentNews writes. The misuse resulted in a total loss of the investors’ funds, according to the publication.

The former COO consented to the SEC’s bar without admitting or denying the regulator’s findings, according to an administrative proceedings document from the SEC. InvestmentNews could not reach Fluetsch for comment.

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The U.S. District Court, Central District of California, had permanently enjoined Fluetsch in May and held him liable for a total of $114,734.72 for disgorgement, prejudgment interest and a civil penalty, according to the publication.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.