Company may be linked to fake ventures

Scores of investors paid more than $500,000 in money-management fees to a Bay Area firm even after it secretly lost their money in fake investment operations called Ponzi schemes, federal regulators allege.

Woodside-based Cornerstone Capital Management sunk up to $15 million of investor funds into a handful of money-losing ventures, including power generation at a Central California grain mill and a Costa Rican currency-exchange scam, according to U.S. Securities and Exchange Commission documents.

In an effort to recover $547,000 in allegedly illegitimate management fees paid by dozens of affected investors to Cornerstone between 2003 and 2007, the SEC on Tuesday commenced civil legal proceedings against the company.

SEC officials in legal filings said the company might not have been initially aware of the “fraudulent nature” of the schemes but it “became aware of substantial evidence demonstrating that the value of the investments was severely impaired” over time.

More than 50 investors were affected.

The SEC said it will try to recover the management fees.

jupton@sfexaminer.com

Bay Area NewsfraudLocalSEC

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Muni to stop running nearly every route in SF — more than 70 lines

UPDATE: 8:30 p.m.: Sources within the San Francisco Municipal Transportation Agency said… Continue reading

Treasure Island hungry for food delivery options

Apps don’t serve neighborhood’s residents

Gov. Gavin Newsom said he ‘owns’ coronavirus testing lapses, announces task force

Gov. Gavin Newsom said California will significantly increase COVID-19 testing capabilities, adding… Continue reading

Constructive Criticism: Tenants, it’s time to get organized

The scanty relief politicians have offered shows we can’t rely on legislation to solve our problems

SF police issue first citation for violating stay at home order to abortion protester

Ronald Konopaski, 86, cited outside Planned Parenthood for allegedly failing to shelter in place

Most Read