Iowans’ Funds Among Missing at Irvine Firm
A federal judge in Los Angeles has frozen the assets of investment firms operated by an Irvine financial adviser in the wake of Securities and Exchange Commission allegations that he defrauded clients out of $75.4 million.
Funds from scores of Iowa governmental agencies are among the frozen assets. The SEC’s charges against Steven D. Wymer and his two companies prompted Iowa’s governor Thursday to call a special meeting to assess the potential damage to as many as 86 public entities, whose surplus funds were managed by Wymer’s firms.
Those agencies have been unable to withdraw money from their investment accounts since Wednesday, when the federal court froze Wymer’s corporate and personal assets and issued a temporary restraining order against him. The action was prompted by a recent SEC discovery that at least $75.4 million was missing from three trusts, including the Iowa Trust, which had a balance of about $100 million.
Wymer’s companies, Institutional Treasury Management and Denman & Co., are responsible for an estimated $1.2 billion invested in U.S. Treasury notes and other securities for some 64 clients. SEC officials say their investigation has concentrated only on the missing $75.4 million, but the probe into Wymer’s activities is continuing.
“We don’t know the extent of the problem right now,” said Elaine Cacheris, acting regional administrator for the SEC’s Los Angeles office. “Seventy-five million dollars is a lot of money, especially for the clients involved. It is possible some of the money will be accounted for.”
Cacheris said the SEC is trying to quickly determine the number of troubled accounts so all investors can retake control of their money.
Wymer, 43, who lives in Newport Beach, could not be reached for comment Thursday.
Wymer’s lawyer, Michael Perlis, said his client did not steal investor money for personal use and has agreed to the temporary restraining order without admitting the SEC’s allegations.
“This is the standard resolution for many SEC cases,” Perlis said. “The SEC alleges the $75 million remains unaccounted for, but the SEC is not contending that he spent it on a lavish lifestyle, nor will it show misappropriation of any sum.”
Perlis declined to comment on where the money might be.
Last week, attorneys in the SEC’s Los Angeles office filed a civil lawsuit in U.S. District Court against Wymer, Institutional Treasury Management and Denman. Wednesday, Judge Richard A. Gadbois Jr. placed Denman and Institutional Treasury Management into temporary receivership, froze Wymer’s corporate and personal assets, and issued a temporary restraining order to assure that Wymer complied with federal securities laws.
SEC attorneys alleged that all $10 million from the account for Marshalltown, Iowa, was missing and that Wymer conducted numerous securities transactions in the Marshalltown account without the client’s knowledge.
SEC attorneys further contend that when Wymer discovered that the SEC was scrutinizing the municipality’s fund, he transferred cash from other accounts into that account to compensate for the discrepancy.
