Garrett Van Wagoner, president of Van Wagoner Capital Management, accepted a seven-year ban from serving as a mutual fund officer or director after he and the firm he founded agreed to pay an $800,000 penalty to settle charges with the Securities and Exchange Commission. The SEC charges the executive and his company misstated securities valuations in a number of funds.
Van Wagoner also accepted a seven-year restriction on activities that he can undertake with the investment advisor. The Commission found that the firm misled shareholders about the value and the size of the investments in illiquid securities in certain portfolios, exceeding the limits set forth in its disclosure documents for illiquid or private holdings. Van Wagoner and his company were also accused of misleading investors about the value of their shares, and thus, the market value of the funds. The firm neither admitted nor denied guilt in the settlement.
"Van Wagoner and his firm committed fraud by misleading mutual fund investors about an important and risky aspect of the Van Wagoner Funds portfolio," said Helane L. Morrison, district administrator of the SECs San Francisco office. "Van Wagoner and his firm betrayed the trust that investors place in mutual fund directors and managers to report their funds market values accurately."
The SEC also said it has settled charges with Robert Colman, a former director of the funds, Audrey Buchner, a former private equity analyst with the company. In this separate settlement, the SEC said Colman purchased private stocks at the same time as the funds without prior approval from the SEC. Buchner was charged with similar personal trading violations and omitting information to conceal the overlap with the funds trading. Colman agreed to pay a penalty of $25,000 and disgorge $16,800, including interest for directors fees he received between 1998 and 2000. Buchner said she would pay a $35,000 penalty.