The SEC charged Benchmark Asset Managers LLC, Harvest Managers LLC (its parent company), and owner/officer Otto Sam Folin with making material misrepresentations and omissions in connection with securities issued by those companies. 

Folin, 62, a resident of Philadelphia, PA, is the MD, CCO and 33% shareholder of Benchmark, a registered adviser ("RIA").  He's also the president, CEO and majority owner of Harvest. 

• From 2002 through March 2011, Benchmark and Folin provided investment advice to clients for compensation, and they raised money by offering and selling a variety of securities issued by Benchmark and Harvest. 
• From 2004 through March 2011, Benchmark and Folin managed and advised a group of hedge funds - the Safe Haven Investment Portfolios.  Almost all the investors in these funds were also advisory clients of Benchmark.

Allegations in SEC Complaint.   It's alleged, among other things, that Folin, Benchmark and Harvest made material misrepresentations and omissions in connection with the offer, purchase and sale of various securities in Benchmark and Harvest to advisory clients, noteholders and the Safe Haven Portfolios, specifically regarding: 

• Safe Haven Portfolios’ loans to Harvest and Benchmark and certain development costs the Safe Haven Portfolios paid to Harvest and Benchmark.
• Improper valuations of the Safe Haven Portfolios loans to Harvest and Benchmark - i.e., they were valued at cost, rather than at fair value, as required by relevant offering documents.  This reflected the loans, on account statements, at inflated values.
• Failure to disclose Benchmark’s precarious financial condition.

Fines and Sanctions.   On 7/21/11, Folin was barred from the industry and ordered to pay, jointly and severally with Benchmark and Harvest, $10.3 million in disgorgement, prejudgment interest and civil penalties.  This civil action is:  SEC v. Otto Sam Folin, et al., Civil Action Number 11-cv-4447, in the United States District Court for the Eastern District of Pennsylvania.  [SEC Investment Adviser Act Release 3254, 7/29/11]