Greenwich Investment Firm Pays SEC Penalties

GREENWICH, CT — A Greenwich investor and his fund paid penalties after the Securities and Exchange Commission alleged that they had failed to disclose ownership information during a series of attempts to influence companies.

Jeffrey Eberwein agreed to pay $90,000 and his company Lone Star Value Management will pay $120,000. As part of the agreement they don’t have to admit or deny the SEC’s findings.

“Full, fair, and accurate disclosures from all parties in a battle for corporate influence or control are critically important to investors particularly when they are called upon to make decisions about their investments,” said Gerald Hodgkins, Associate Director of the SEC Division of Enforcement. “Investors in these companies were deprived of key facts needed to make informed investment decisions.”

The SEC found that Eberwein and Charles Gillman collaborated with mutual fund adviser Heartland Advisors in some of five campaigns to exert control over microcap companies. In other campaigns Lone Star Value Management and a private fund advised by Gillman called Boston Avenue Capital tried to exert control.

“ In each of these campaigns, the groups collectively owned more than five percent and sometimes even more than 10 percent of the companies’ outstanding common stock, yet the required ownership filings to disclose that information to the investing public were either incomplete, untimely, or altogether absent,” the SEC said in a statement.

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