You can read about the SEC's actions in this press release link: https://www.sec.gov/news/press-release/2020-110
Everyone has opinions, but I have to fault the SEC for approving this firm as a Registered Investment Adviser in the first place on August 13, 2014. Everything about this firm is murky and they use a bunch of investment jargon which is often necessary to con people out of their money. Of course, the firm is innocent until proven guilty. However, I present some evidence to bolster my opinion which again is just an opinion.
They became registered with the SEC on August 13, 2014. However, they were touting their performance before then in a very peculiar fashion. For their TCA Global Credit Master Fund LP, they show a performance table in this document that shows their monthly returns since inception of April 2010. (I am sure they hate the fact that this document is on the Internet now, but your experienced Chief Compliance Officer sleuth has found it.) As you examine this table, specifically the "Onshore Monthly Performance (%) Net of Fees" table, please notice the fact that they never lost any money in any particular month for the period shown. www.portfoliomi.com/pdf/AMI-TCA-FACTSHEET-JAN-2015.pdf. Correct me if I am wrong, but don't you find that just a wee bit unusual?
The second thing that jumps out at me is the location of this "fund." Cayman Islands. Now, come on SEC, why on earth would you approve a firm that is a Registered Investment Adviser when they have an "investment" (and I am using that term very loosely) based in the Cayman Islands? Seriously, you guys need me approving firms as Registered Investment Advisers. I would never approve a firm like this one as an RIA
The other thing that bothers me is that they charge a 2% management fee, plus a 20% of profits Performance Fee. Ah ha! This is a hedge fund! Well, of course only sophisticated investors with the requisite net worth can invest in hedge funds as you know. Their minimum investment is $500,000. Of course, just because you have $500,000 or more to invest does not mean that you are smart. In my opinion, you should read the 2nd Edition of my book, Meet Wally Street. The Reason You're Stupid. There is a link in the right hand column of this blog.
There are many points that I can make here, but look at these items if you will.
- They were touting performance before being registered with the SEC as an RIA.
- They mention that their performance was calculated by a "third party administrator," but did not name this firm in this document. How convenient!
- Their performance never had a losing month! This comes in very handy as it relates to number 5. below.
- They are based in the Cayman Islands. Most people do not even know where the Cayman Islands are located, their tax laws, their asset protection laws, their treaties or lack thereof with the United States and on and on.
- They charge a performance fee of 20% based on positive returns which is really nice when you consider number 3. above.
Did I mention that TCA Fund Management Group was also registered in the United Kingdom and other countries? Supposedly, they are registered in the Cayman Islands, the United Kingdom, the Netherlands, Belgium and finally, the United States. Who knows if any of this is true? I am sure all of their investors know and did their due diligence before investing. I know. I know. I am being sarcastic.
I don't know how long this You Tube video is going to survive before the attorneys catch it, but if the link still works, I want you to watch this and tell me what in the hell TCA Fund Management Group does. I have a hope and a prayer that this young lady is one of the whistleblowers helping the SEC. https://www.youtube.com/watch?v=QCbWFC9rGu4
Don't forget that I am a compliance sleuth. I found this when I DuckDuckGo'd her name after watching the You Tube Video above. If you will notice that first thing in this DuckDuckGo search lists her, Tara Antal, as Chief Compliance Officer and Chief Administrative Officer. https://duckduckgo.com/?q=tara+antal+tca+fund+management+group&t=ffnt&ia=web Who knows what in the hell a Chief Administrative Officer does, but I do know what a Chief Compliance Officer does. Funny thing is that I could not find her at the Adviser Check web site either. Rather curious, don't you agree?
When you click on that link to her LinkedIn account, it does not exist any more. So, this is the scary part and why I hope and pray that she is one of the whistleblowers. I am in no way being prejudicial against young women, but I have a hard time believing that this young lady has the requisite skill set, experience and knowledge to be a Chief Compliance Officer for a hedge fund. Watch the video again and you will see that she struggled to explain what the firm does. At the time of this video she was a Senior Financial Analyst, but somehow she made the jump from that position in 2014 to a Chief Compliance Officer of a firm with supposedly $489,835,822 in regulatory assets under management as of January 31, 2019. She was CCO of almost a half a billion dollar RIA firm? Hopefully, she has "lawyer-ed up", because she is in a heap of trouble as the Chief Compliance Officer for this firm, unless she is one of the whistleblowers, then the SEC might work a deal with her. Let's pray for her.
This is a big lesson for young people. Do not accept a fancy title like Chief Compliance Officer unless you have a ton of experience, lots of control and know everything about a firm and its investment offerings. Otherwise, you could end up like this young lady in a big legal mess. Maybe she already quit this firm and called the SEC before they dropped the hammer. Let's hope so.
Another interesting fact about this firm is their Form ADV 2A given to clients. They do not have one posted for 2020 as they are required to do. However, never fear, you compliance sleuth is on the case. I found one for 2019. https://adviserinfo.sec.gov/firm/summary/169163
Funny thing is that there are a bunch of glaring problems with this document. One obvious one is where is the money held? Their answer is "banks or other qualified custodians to hold all assets of these Clients." WTF? Are you freaking kidding me? They do not even tell people where their money is? I'll say it again. WTF?
This is proof positive that the SEC did not look at this document when it was filed. If they did, they would have instituted an immediate examination. The SEC's answer will be that they are understaffed and need more funding. There is this thing called reading Form ADV 2A filings. After all, once you submit this Form ADV 2A, then someone at the SEC is notified electronically. I would venture to say nobody read it when it was filed. Just a guess on my part. Don't get me wrong. We need the SEC, but they need someone like me helping them as an outside consultant on RIA exams and inspections.
Let me give you another glaring mistake. This firm was subject to independent auditors. In this 2019 Form ADV 2A, they said that they "expect to distribute audited financial statements to all investors ...within 120 days of the end of the fiscal year." Expect to? Expect to? WTF?
Another thing is the way they described the guy who owns the firm in this 2019 Form ADV 2A. "The Firm is controlled and majority owned by Robert Press via one or more affiliated entities." Huh? One or more affiliated entities? WTF? What affiliated entities? What are the names of these "affiliated entities" and are any of these "affiliated entities" regulated in any way? Have they been subject to any lawsuits? Sadly, the way this is worded, an investor has no freaking idea. Apparently, they do not have a problem writing a check for $500,000 though.
I wonder. Perhaps this may offer some insight into why there is no 2020 Form ADV 2A and further answer the question as to why they are currently under investigation by the SEC. Their independent financial auditor maybe did not sign off on it.
Oh well. Another cautionary tale for a lot of people.
No comments:
Post a Comment