O.C. firm to settle Ponzi suit with SEC

An Orange County investment advisor and his firm agreed Wednesday to pay more than $100,000 to settle charges by the Securities and Exchange Commission that they placed clients into what turned out to be a Ponzi scheme run by disgraced Democratic fundraiser Norman Hsu.

The SEC alleged that Paul H. Heckler and his Tustin firm, Yosemite Capital Management, defrauded clients by conducting inadequate research before investing $3.25 million in a company that secretly fed clients into Hsu’s Ponzi scheme.

The company, Ashton Investments, claimed to invest in short-term bridge loans yielding as much as 24% annually, the SEC said.

Attorneys for Heckler and Yosemite could not be reached for comment. Neither Heckler nor Yosemite admitted wrongdoing.

A former high-profile Democratic fundraiser, Hsu was sentenced to more than 24 years in prison last year for fraud and violating campaign-finance laws. A California judge sentenced him to three years in prison in 2008 for bilking investors in a fraud in which he claimed to buy and resell latex gloves.

Heckler placed four clients with Ashton despite receiving no information from the company about its finances and getting “incomplete, contradictory and evasive responses” from the firm about its operations, according to the agency. Heckler was told that Hsu was a private person who didn’t give out information, the SEC said.

Heckler agreed to pay a $26,000 civil penalty. Yosemite will pay almost $80,000.

walter.hamilton

@latimes.com