SEC charges NY real estate investment adviser with securities fraud
The Securities and Exchange Commission charged a New York investment adviser with various securities violations, alleging he fraudulently sold securities in an upstate real estate investment fund. The federal regulator claims Lloyd Barriger assured investors his Gaffken & Barriger Fund was safe and able to generate a return of at least 8% per year. The SEC said the fund performance was significantly less, and Barriger defrauded investors in Campus Capital Corp. by raising money from that firm to help the struggling G&B fund without disclosing the funds would be used for that purpose. "In the midst of the credit crisis, Barriger chose to lie about the solvency and liquidity of his fund rather than admit the somber truth of a collapsing business," said George Canellos, director of the SEC's New York office. "He continued to solicit new investor funds based on the same misrepresentations up until the day before the fund collapsed." The SEC said Friday in a complaint filed in federal court the G&B fund raised $20 million over 10 years, including about $12 million from Campus Capital. Barriger froze the fund in 2008, but the SEC said he steered its assets by having the fund pay cash distributions to investors who requested returns. The regulator claims Barriger allowed Campus Capital to inject $2.5 million into the fund one year when it was in distress. This information, however, was not disclosed to Campus Capital. Write to: Kerri Panchuk.