Stamford-based Michael Kenwood Group and majority-owner Francisco Illarramendi were charged with misappropriating at least $53 million in investor funds and using the money for self-dealing transactions.  Illarramendi allegedly defrauded hedge fund investors by transferring their money into bank accounts he personally controlled, then invested for himself or for entities he controlled. 

Through the adviser entity, Illarramendi managed several hedge funds, including one that contains up to $540 million in assets.  The SEC’s complaint alleges that Illarramendi took at least $53 million in investor money out of this hedge fund without the knowledge or consent of the hedge fund’s investors.   The SEC sought an asset freeze and other emergency relief.

    Named in the SEC Complaint.   (i) Illarramendi;  (ii) Michael Kenwood Capital Management, LLC;  (iii) Illarramendi-controlled entities - Michael Kenwood Asset Management LLC, Michael Kenwood Energy and Infrastructure LLC, and MKEI Solar LP - are relief defendants. SEC also seeks permanent injunctions, disgorgement, plus prejudgment interest, and civil penalties.  

    SEC Staff Credits.   Carlos Costa-Rodrigues, Sofia Hussain, Michelle Perillo, LeeAnn Ghazil Gaunt of SEC Boston Regional Office investigated after Zerubbabel Johnson, Stephen Latin, Michael O’Connell, Elizabeth Salini examined.  Litigation is being led by Rua Kelly.  The SEC’s investigation is ongoing.    [SEC PR 11-30, 1/28]