The SEC has charged Brian Ourand, a former financial advisor to Mike Tyson, with stealing $670,000 from three clients. In an earlier case that settled out of court, Tyson, the heavyweight champion and actor, sued Ourand for allegedly stealing $300,000 and causing him losses of up to $5 million.
The compliance chief at SFX Financial Advisory Management Enterprises, Eugene S. Mason, agreed to pay the commission a $25,000 fine in a related case, the commission says. In addition, SFX, a division of the live events producer Live Nation Entertainment, agreed to pay a fine of $150,000.
Neither Ourand nor Mason could be reached for comment. A spokeswoman for Live Nation did not immediately return calls.
The thefts occurred from 2006 to 2011 when Ourand, 53, who was then SFX's president, wrote checks from client bank accounts payable to cash or to himself and wired money from those accounts to himself for his personal use, the SEC says.
Ourand provided bill-paying services to several clients, had full signatory power over their accounts and also had unauthorized access to some of their credit card accounts, according to the SEC. When a client discovered he could not use his credit card in July 2011, it triggered detection of the fraud. No information was given about the identity of the clients in this case.
As chief compliance officer, Mason failed to ensure that SFX's policies and procedures were designed to prevent the misappropriation of client funds. "In particular," the SEC wrote, "SFX's policies were not reasonably designed to prevent the person authorizing payments that SFX made from client accounts from circumventing secondary review of those payments. Thus, Ourand was able to circumvent secondary review of the payments he authorized from client accounts."
Despite the fact that the firm's 2011 Form ADV Part 2 brochure assured clients that their cash accounts used for bill paying were reviewed several times a week for accuracy and appropriateness, neither the company nor Mason implemented these provisions, the order says.
Mason is still the firm's chief compliance officer, according to its March Form ADV.
SFX withdrew its registration with the SEC in 2012, but remains registered in the District of Columbia, with $15 million in client funds under management, according to its most recent filing.
The SEC plans to hold a public hearing in the Ourand case, which is ongoing.
- Ex-Compliance Chief Charged With Looting $500,000
- Advising HNW Athlete, Entertainer Clients
- FINRA Banishes Former Wells Fargo Advisor
- $170M Case Brought Against Morgan Stanley, Advisor & Branch Manager