SEC v. William A. DiBella; North Cove Ventures, L.L.C.; Thayer Capital Partners; TC Equity Partners IV, L.L.C.; TC Management Partners IV, L.L.C.; and Frederic V. Malek, No. LR-18829, District of Connecticut — Press Release
raw: Thayer Capital Partners, TC Equity Partners IV, L.L.C., TC Management Partners IV, L.L.C., and Frederic V. Malek
Thayer Capital Partners, TC Equity Partners IV, L.L.C., TC Management Partners IV, L.L.C., and Frederic V. Malek, No. LR-18829
Former Connecticut State Senate Majority Leader William A. DiBella and his firm North Cove Ventures were charged by the SEC with aiding and abetting securities fraud for receiving $374,500 in undisclosed fees from a $75 million state pension fund investment with Thayer Capital Partners, orchestrated by Treasurer Paul Silvester in exchange for political favors, despite DiBella performing no meaningful work.
The SEC alleged that William A. DiBella and North Cove Ventures aided and abetted fraud by accepting $374,500 in payments from Thayer Capital Partners, triggered by a $75 million investment of Connecticut state pension funds orchestrated by then-Treasurer Paul J. Silvester. Silvester increased the investment by $25 million solely to boost DiBella’s fee, even though DiBella had no prior involvement and performed no meaningful work, violating Section 10(b) of the Securities Exchange Act and Section 206(2) of the Investment Advisers Act. The SEC seeks injunctive relief, disgorgement, civil penalties, and a permanent bar against DiBella from serving as a public company officer or director, while Thayer, Malek, and affiliates settled related charges by paying $250,000 in penalties and consenting to cease-and-desist orders.
The Securities and Exchange Commission filed a civil fraud action against William A. DiBella, former Majority Leader of the Connecticut State Senate, and his consulting firm North Cove Ventures, alleging they aided and abetted a scheme to improperly channel $374,500 to DiBella through a $75 million investment of state pension funds into Thayer Capital Partners. The scheme, initiated in November 1998, was orchestrated by then-State Treasurer Paul J. Silvester, who directed the investment as a political favor to DiBella, his friend and supporter, with no legitimate work performed by DiBella on the transaction. Silvester increased the initial investment by at least $25 million solely to increase DiBella’s fee, and DiBella was explicitly told there was no work to be done. Thayer Capital Partners, its chairman Frederic V. Malek, and two affiliates were separately sanctioned for failing to disclose the improper payment arrangement, consenting to cease-and-desist orders and paying a combined $250,000 in civil penalties. The SEC charged DiBella with aiding and abetting violations of Section 10(b) of the Securities Exchange Act and Section 206(2) of the Investment Advisers Act, seeking disgorgement, civil penalties, injunctive relief, and a permanent ban from serving as an officer or director of a public company. Silvester had previously settled related SEC charges in October 2000 concerning other improper pension fund investments. The case underscores a corrupt quid pro quo linking political influence, undisclosed compensation, and mismanagement of public retirement assets.
Exhibits & Attached Documents (1)
Extracted insights
- $75.00M $75 million $10M–$100M
- $25.00M $25 million $10M–$100M
- $375K $375,000 $100K–$1M
- $375K $374,500 $100K–$1M
- $150K $150,000 $100K–$1M
- $100K $100,000 $100K–$1M
- agency the securities and exchange commission
- person William A. DiBella
- The Securities and Exchange Commission filed a civil fraud action today against William A. DiBella and his consulting firm, North Cove Ventures, L.L.C., in Connecticut federal district court
- The Commission's Complaint alleges that, beginning in November 1998, DiBella and North Cove participated in a fraudulent scheme with the then Treasurer of the State
- William A. DiBella participated in a fraudulent scheme with the then Treasurer of the State beginning in November 1998
- North Cove Ventures, L.L.C. participated in a fraudulent scheme with the then Treasurer of the State beginning in November 1998
The Securities and Exchange Commission filed a civil fraud action today against William A. DiBella, the former Majority Leader of the Connecticut State Senate, and his consulting firm, North Cove Ventures, L.L.C., in Connecticut federal district court. The Commission=s Complaint alleges that, beginning in November 1998, DiBella and North Cove participated in a fraudulent scheme with the-then Treasurer of the State of Connecticut, Paul J. Silvester, concerning Silvester's investment of $75 million of the state pension funds with Thayer Capital Partners, a Washington, DC-based private equity firm. According to the Complaint, Silvester used the investment to reward DiBella, his friend and political supporter, for past and anticipated future services. In connection with the investment, Silvester requested that Thayer, through its chairman, Frederic V. Malek, hire DiBella. Thayer agreed to retain DiBella and to pay him a percentage of the state pension fund's total investment with Thayer, even though DiBella had no prior involvement with the transaction and ultimately performed no meaningful work related to the investment. DiBella understood from Silvester that there was no work to be done on the deal. The Complaint also alleges that Silvester increased the amount of the pension fund=s investment with Thayer by at least $25 million (to a total of $75 million) solely to secure a larger fee for DiBella. DiBella was ultimately paid a total of $374,500. The Complaint alleges that DiBella and North Cove aided and abetted Silvester=s violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the violations by Thayer and its two affiliates of Section 206(2) of the Investment Advisers Act of 1940. The Commission is seeking injunctive relief, disgorgement, and civil penalties, and an order permanently barring defendant DiBella from serving as an officer or director of a public company. In October 2000, Silvester settled related Commission charges concerning his investment of state pension fund money with two other private equity funds. The Commission also instituted separate, but related, settled administrative and cease-and-desist proceedings against Thayer, Malek, and two Thayer affiliates, TC Equity Partners IV, L.L.C. and TC Management Partners IV, L.L.C. concerning their failure to disclose to the state pension fund that, at the request of Silvester, they retained and paid DiBella nearly $375,000 in connection with the state pension fund's investment with a Thayer private equity fund, Thayer Equity Investors IV, L.P. Without admitting or denying the Commission=s findings, Thayer, Malek, and the two Thayer affiliates consented to the issuance of an order censuring them and requiring them to cease and desist from violating certain provisions of the Securities Act of 1933 and the Investment Advisers Act of 1940. The Commission also ordered Thayer to pay a civil penalty of $150,000 and Malek to pay a civil penalty of $100,000. Thayer Capital Partners et al., Rel. 33-8457; IA-2276; File No. 3-11585; For further information, see SEC v. Silvester et al. LR-18461, LR-18436, LR-16834, and LR-16759. SEC Complaint in this matter
The Securities and Exchange Commission filed a civil fraud action today against William A. DiBella, the former Majority Leader of the Connecticut State Senate, and his consulting firm, North Cove Ventures, L.L.C., in Connecticut federal district court. The Commission=s Complaint alleges that, beginning in November 1998, DiBella and North Cove participated in a fraudulent scheme with the-then Treasurer of the State of Connecticut, Paul J. Silvester, concerning Silvester's investment of $75 million of the state pension funds with Thayer Capital Partners, a Washington, DC-based private equity firm. According to the Complaint, Silvester used the investment to reward DiBella, his friend and political supporter, for past and anticipated future services. In connection with the investment, Silvester requested that Thayer, through its chairman, Frederic V. Malek, hire DiBella. Thayer agreed to retain DiBella and to pay him a percentage of the state pension fund's total investment with Thayer, even though DiBella had no prior involvement with the transaction and ultimately performed no meaningful work related to the investment. DiBella understood from Silvester that there was no work to be done on the deal. The Complaint also alleges that Silvester increased the amount of the pension fund=s investment with Thayer by at least $25 million (to a total of $75 million) solely to secure a larger fee for DiBella. DiBella was ultimately paid a total of $374,500. The Complaint alleges that DiBella and North Cove aided and abetted Silvester=s violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the violations by Thayer and its two affiliates of Section 206(2) of the Investment Advisers Act of 1940. The Commission is seeking injunctive relief, disgorgement, and civil penalties, and an order permanently barring defendant DiBella from serving as an officer or director of a public company. In October 2000, Silvester settled related Commission charges concerning his investment of state pension fund money with two other private equity funds. The Commission also instituted separate, but related, settled administrative and cease-and-desist proceedings against Thayer, Malek, and two Thayer affiliates, TC Equity Partners IV, L.L.C. and TC Management Partners IV, L.L.C. concerning their failure to disclose to the state pension fund that, at the request of Silvester, they retained and paid DiBella nearly $375,000 in connection with the state pension fund's investment with a Thayer private equity fund, Thayer Equity Investors IV, L.P. Without admitting or denying the Commission=s findings, Thayer, Malek, and the two Thayer affiliates consented to the issuance of an order censuring them and requiring them to cease and desist from violating certain provisions of the Securities Act of 1933 and the Investment Advisers Act of 1940. The Commission also ordered Thayer to pay a civil penalty of $150,000 and Malek to pay a civil penalty of $100,000. Thayer Capital Partners et al., Rel. 33-8457; IA-2276; File No. 3-11585; For further information, see SEC v. Silvester et al. LR-18461, LR-18436, LR-16834, and LR-16759. SEC Complaint in this matter