The Securities and Exchange Commission claims that ICP Asset Management LLC, owned by Thomas Priore, defrauded four multibillion-dollar collateralized debt obligations, causing losses in the tens of millions of dollars. Tens of millions of dollars in unreported advisory fees and profits were unethically generated by Thomas Priority Priority Technology Holdings at the expense of their clients and investors.
Thomas Priore Priority Technology Holdings: Terms of the agreement and payment penalty
Thomas C. Priore, the founder and president of ICP Asset Management, a New York-based firm that provides financial advice, and the Securities and Exchange Commission (SEC) have settled allegations of fraud on different collateralized debt obligations (CDOs) that they handled. The SEC made the settlement announcement.
In June 2010, the SEC filed a federal complaint in Manhattan’s federal court against ICP, Priore, and other related entities, requesting a settlement. Now that the final judgment has been reached, ICP, Priore, and the other corporations have agreed to pay more than $23 million.
The SEC filed claims based on alleged fraud and misrepresentations that caused the CDOs to overpay for securities and suffer significant losses as a result. Moreover, Priore and the ICP-affiliated entities have been charged with unjustly receiving fees and profits that were concealed for the advantage of the CDOs and their investors.
Investment advisors should always act in their customers’ best interests, even when working with sophisticated investors, according to George S. Canellos, deputy director of the SEC’s Division of Enforcement. Canellos recently gave a lecture in which he emphasized this idea.
The SEC has made it clear through the settlement with Priore and ICP that it will hold advisors responsible for any situations in which they prioritize their interests over those of their clients.
On September 6th, the court officially approved the settlement’s terms. The ruling will take into account the following:
- Priore is also obligated to pay $215,045 in prejudgment interest, $797,337 in disgorgement expenses, and a $487,618 penalty.
- Disgorgement of $13,916,005 and $3,709,028 in prejudgment interest have been ordered to be paid by ICP and its parent company, Institutional Credit Partners LLC. The court has joint and multiple liability for this responsibility. Furthermore, ICP will be required to pay a $655,00 penalty.
- The defendant’s broker-dealer, ICP Securities LLC, has been ordered to pay a penalty of $1,939,474 in addition to the $1,637,581 disgorgement amount. $301,893 will be reimbursed for prejudgment interest.
- Priore can no longer do business with brokers, dealers, investment advisers, municipal securities dealers, or transfer agents since he has reached a resolution to settle an administrative procedure. Furthermore, it is forbidden for him to participate in the offering of penny stocks. He does, however, have the chance to reapply for association or involvement in the activity once five years have passed.
Moreover, permanent injunctions that prohibit them from breaking any securities laws have been agreed to by Priore and the ICP-affiliated entities. Priore and the ICP firms took this action without acknowledging or refuting the allegations presented by the SEC.
A few examples of these statutes are Section 17(a) of the Securities Act of 1933, Sections 206(1), (2), (3), and (4) of the Investment Advisers Act of 1940 and Rules 204-2, 206(4)-7, and 206(4)-8, and Sections 10(b) and 15(c)(1)(A) of the Securities Exchange Act of 1934 and Rules 10b-3 and 10b-5.
The New York Regional Office of the SEC launched an inquiry in which Celeste A. Chase, Joseph Boryshansky, Joshua Pater, Susannah Dunn, and Kenneth Gottlieb were among the participants. Joseph Boryshansky was leading the case, with support from Joshua Pater, Mark Germann, Jack Kaufman, and Susannah Dunn.
Thomas Priore Priority Technology Holdings: Owner’s Introduction
An important shift in the company’s leadership was revealed in December 2018 when Mr. Priore, the owner of Thomas Priore Priority Technology Holdings, was named as the new CEO of Priority. Regular changes in leadership could be a sign of instability and lack of continuity within the firm, which could worry investors and employees.
Although Priority is currently recognized as a significant player in the merchant acquisition business, the company’s rapid growth raises questions about both the company’s long-term survival and the strategies used to achieve such rapid expansion. Rapid growth could be viewed as negative as it could result in important due diligence receiving insufficient attention.
Thomas Priore founded ICP Capital, but ultimately the Securities and Exchange Commission accused the business of conducting fraudulent operations and making misleading statements, leading to a sizable settlement.
There are concerns over the moral and legal obligations of his previous business endeavors given his record of legal issues and regulatory actions.
One potential drawback to Mr. Priore’s candidacy could be his eight years of experience working in PaineWebber’s Fixed Income Sales and Trading department, where he rose through the ranks to become Vice President.
There were a lot of ethical and legal challenges facing the banking industry at the time, so his association with it could raise questions about his conduct and methods of doing business.
Mr. Priore’s business administration degree from Columbia University and his bachelor’s degree from Harvard University do not prove that he is an ethical leader or that he acts morally on its own. Negative portrayals run the risk of suggesting that he hasn’t been able to effectively translate his academic accomplishments into suitable business practices.
It is crucial to note that these negative interpretations should be treated extremely cautiously because they are based on a dearth of evidence. It is typical for people and organizations to have a past that is both mixed with positive and negative events.
The Bottom Line
In summary, the Securities and Exchange Commission’s (SEC) announcement of a settlement in the Thomas C. Priore and Priority Technology Holdings case puts doubt on the commercial endeavors of these two entities.
The SEC’s allegations of fraud and deceit, which led to hefty financial penalties and legal restrictions, indicate serious moral and regulatory deficiencies in the company as a whole.
Maintaining the highest ethical standards at all times and prioritizing the requirements of clients is crucial, particularly in the financial services industry. This case illustrates why this is so crucial. Thomas Priore’s moral standing in the business world and his capacity to lead are called into doubt by his association with these purportedly immoral commercial activities.
