In re ROBERT C. ACRI

 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES ACT OF 1933 
Release No. 9599 / June 11, 2014 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 72370 / June 11, 2014 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 3854 / June 11, 2014 
 
INVESTMENT COMPANY ACT OF 1940 
Release No. 31077 / June 11, 2014 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-  15926 
 
In the Matter of 
 
ROBERT C. ACRI  
 
Respondent. 
ORDER INSTITUTING PUBLIC 
ADMINISTRATIVE AND CEASE-AND-
DESIST PROCEEDINGS, PURSUANT TO 
SECTION 8A OF THE SECURITIES ACT 
OF 1933, SECTIONS 4C, 15(b), AND 21C 
OF THE SECURITIES EXCHANGE ACT 
OF 1934, SECTIONS 203(f) AND 203(k) OF 
THE INVESTMENT ADVISERS ACT OF 
1940, SECTION 9(b) OF THE 
INVESTMENT COMPANY ACT OF 1940, 
AND RULE 102(e)(1)(iii) OF THE 
COMMISSION’S RULES OF PRACTICE 
MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 
 
I.  
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public  interest  that  public  administrative  and  cease-and-desist  proceedings  be,  and  hereby  are,  
instituted  pursuant  to  Section  8A  of  the  Securities  Act  of  1933  (“Securities  Act”),  Sections  4C, 
15(b),  and  21C  of  the  Securities  Exchange  Act  of  1934  (“Exchange  Act”),  Sections  203(f)  and  
203(k)  of  the  Investment  Advisers  Act  of  1940  (“Advisers  Act”),  Section  9(b)  of  the  Investment  
Company Act of 1940 (“Investment Company Act”), and Rule 102(e)(1)(iii) of the Commission’s 
Rules of Practice against Robert C. Acri ( “Acri” or “Respondent”). 
 

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II.  
 In  anticipation  of  the  institution  of  these  proceedings,  Respondent  has  submitted  an  Offer  
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over him and the subject matter of these proceedings, which  are  
admitted,  Respondent  consents  to  the  entry  of  this  Order  Instituting  Public Administrative  and  
Cease-and-Desist  Proceedings  Pursuant  to  Section  8A  of  the  Securities  Act,  Sections  4C, 15(b), 
and  21C  of  the  Securities  Exchange  Act  of  1934,  Sections  203(f)  and  203(k)  of  the  Investment  
Advisers  Act  of  1940,  Section  9(b)  of  the  Investment  Company  Act  of  1940,  and  Rule  
102(e)(1)(iii)  of  the  Commission’s  Rules  of  Practice,  Making  Findings,  and  Imposing  Remedial  
Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
III.  
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that 
Summary 
 These proceedings arise out of fraud by an investment adviser in connection with the offer 
and sale of promissory note securities. Between April and September 2011, Acri, as the controlling 
managing  member  of  Commission-registered  investment  adviser  Kenilworth  Asset  Management  
LLC  (“Kenilworth”),  defrauded  Kenilworth’s  investment  advisory  clients  in  the  offer  and  sale  of  
$240,000  in  promissory  note  securities  of  Prairie  Common  Holdings  LLC  (“Prairie”). Acri  told 
clients that their funds would be used in the development of a retail parcel located near Hammond, 
Indiana, and that their investments would be secured by real estate. Acri, however, misappropriated 
$41,250 of the total proceeds, and the investments were never secured.  Acri also failed to disclose 
material  information  to  advisory  clients  concerning:  (1)  a  conflict  of  interest  arising  from  his 
motivation to  engage  in  the  offering  to  help  other  Kenilworth  advisory  clients  recover  on  a  prior,  
delinquent   $500,000   loan   to   Praedium   Development   Corporation   (“Praedium”),   Prairie’s   
developer;  (2)  the  distressed  financial  condition  of  the  real  estate  development  project  of  which  
Prairie  was  a  part,  Praedium,  and  a  Praedium  principal;  and  (3)  the  five  percent  commission  
Kenilworth would receive on sales of the securities, which totaled $13,750. Based on these actions, 
Acri willfully violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and 
Rule 10b-5 thereunder,  and Sections 206(1) and 206(2) of the Advisers Act. 
 
                                                 
1
  The  findings  herein  are  made  pursuant  to  Respondent’s  Offer  of  Settlement  and  are  not  binding  on  any  
other person or entity in this or any other proceeding. 
 
 

 3 
Respondent 
1. Robert C. Acri is 57 years old and a resident of Winnetka, Illinois. Acri was 
the founder, co-owner, and manager of Kenilworth Asset Management LLC, an investment adviser 
registered  with  the  Commission.  In  July 2012, Acri  resigned as  a  principal  and  his ownership of 
Kenilworth  was  terminated.  Acri  was  also  the  founder  and  manager  of  the  KAM  Private  Fund, 
LLC, a private pooled investment vehicle not registered with the Commission. From January 2010 
through June 2011, Acri was also associated with a broker-dealer registered with the Commission. 
Acri is also an attorney licensed to practice in Illinois. 
Other Relevant Entities 
2. Kenilworth Asset Management LLC, an Illinois limited liability company 
formed on March 27, 2002, is an investment adviser registered with the Commission since February 
25, 2011. Kenilworth’s principal place of business is in Kenilworth, Illinois.  
3. KAM  Private  Fund,  LLC  (“KAM  Private  Fund”),  an  Illinois  limited  
liability  company  formed on November  23,  2004,  was  a  private  pooled  investment  vehicle  not  
registered  with  the  Commission.  KAM  Private  Fund’s  principal  place  of  business  was  in  
Kenilworth, Illinois, and although it   was administratively dissolved by the State of Illinois on May 
11, 2007, Acri continued to operate it until approximately June 2012. 
4. Praedium  Development  Corporation,  an  Illinois  corporation  formed on 
December  30,  1998, is  in  the  business  of  real  estate  development  and  is  not  registered  with  the  
Commission. Praedium’s principal place of business is in Northbrook, Illinois. 
5. Woodmar  Hammond,  LLC  (“Woodmar”),  an  Illinois  limited  liability  
company affiliated with Praedium and formed on January 19, 2005, was formed to hold a real estate 
investment located near Hammond, Indiana, and is not registered with the Commission. Woodmar, 
whose principal place of business was in Northbrook, Illinois, was involuntarily dissolved on July 
12, 2013. 
6. Prairie  Common  Holdings  LLC,  an  Illinois  limited  liability  company  
affiliated  with  Praedium  and  formed  on  January  27,  2011,  was  formed  to  hold  a  real  estate  
investment  located  near  Hammond,  Indiana,  and  is  not  registered  with  the  Commission.  Prairie’s 
principal place of business is in Northbrook, Illinois. 
Facts 
7. In  2011,  Acri  controlled  Kenilworth,  a  Commission-registered  investment  
adviser.  Acri,  as  Kenilworth’s  founder  and  one  of  its  managing  members,  controlled  its  bank  
accounts, hired its employees, and made significant decisions concerning the investments it offered 
to its clients and its policies and practices.  
8. In January 2005, Acri, as adviser to the KAM Private Fund in which several 
Kenilworth clients were or later became investors, invested $500,000 of the fund’s assets in a one-
year  promissory  note  bearing  15%  interest  and  issued  by  Praedium,  a  real  estate  development  
company controlled by Acri’s friend (“the Praedium principal”) and one other person. The purpose 

 4 
of  the  Praedium  note  investment  was  to  provide  funds  to  Praedium  for  use  with  Woodmar,  an  
entity created by Praedium to redevelop a retail shopping center near Hammond, Indiana.  
9. As  the  Woodmar  project  struggled  to  move  forward,  Praedium  failed  to  
make  any  payments  on  its  $500,000  promissory  note  issued  to  the  KAM  Private  Fund.  The  
economic and real estate downturn of 2008-09 further increased Praedium’s/Woodmar’s financial 
distress  by  making  it  difficult  for  Praedium/Woodmar  to  secure  leases  from  prospective  tenants  
and to obtain necessary financing, including the promised tax increment financing (TIF) from the 
City  of  Hammond  upon  which  the  economic  viability  of  the  project  depended.  As  a  result,  
Praedium/Woodmar became delinquent on a mortgage, the payment of its property taxes, and the 
payment to some of its contractors. 
10. As  a  potential  way  forward,  Praedium  developed  a  plan  wherein  two  
smaller parcels would be separated from the Woodmar project and developed so as to create equity 
in  the  larger  Woodmar  project  and  demonstrate  that  progress  was  being  made  overall.  To  
accomplish this plan, Praedium created two new companies, including Prairie Common Holdings, 
to own and develop the two smaller parcels. 
 
11. Because Praedium required financing to advance the Prairie project but was 
unable to obtain it from banks and other traditional lenders, the Praedium principal turned to Acri 
for assistance in finding investors to supply the necessary funds. 
 
12. In  early  2011,  Acri  decided  to  raise  funds  for  Prairie  from  Kenilworth’s  
clients. One of Acri’s primary  purposes for selling Prairie promissory notes to Kenilworth clients 
was  to  give  other  Kenilworth  clients  (i.e.,  those  who  had  invested  in  the  KAM  Private  Fund)  a 
chance to recover on their earlier investment in Praedium.  
 
13. Acri  and  the  Praedium  principal  agreed  that  Kenilworth  would  receive  a  
five percent commission on the sales of Prairie promissory notes. 
14. From  approximately  April  2011  through  September  2011,  Acri  and  a  
Kenilworth  associate  offered  and  sold  a  total  of  $240,000  in  Prairie  promissory  notes  to  six  
Kenilworth  clients.  Acri  drafted  these  notes,  which  bore  a  15%  annual  interest  rate  and  stated  
maturities of approximately 6 to 8 months.  
15. In  his  offer  and  sale  of  the  Prairie  promissory  notes,  Acri  told  Kenilworth  
clients that their funds would be used in the development of a retail parcel located near Hammond, 
Indiana. 
16. In his offer and sale of the Prairie promissory notes, Acri knowingly failed 
to  tell Kenilworth clients the following material facts:  
• Kenilworth  clients  and  others,  through  the  KAM  Private  Fund,  loaned  
$500,000 to Praedium for the development of Woodmar in 2005; 
• the  KAM  Private  Fund  had  not  been  paid  anything  by  Praedium  on  this  
loan; 

 5 
• that  a  primary  purpose  for  the selling of the  Prairie  notes  to  Kenilworth  
clients was to give other Kenilworth clients (i.e., those who had invested in 
the  KAM  Private  Fund)  a  chance  to  recover  on  their  earlier  investment  in  
Praedium; 
• Praedium/Woodmar  had  been  delinquent  in  the  payment  of  its  mortgage,  
property taxes, and some contractor invoices;  
• Praedium was also the developer of the Prairie project; 
• the Praedium  principal  was Acri’s  personal  friend  and  was  also  having 
financial difficulties; and 
• Kenilworth  would  receive  a  five  percent  commission  on  the  sale  of  the  
Prairie notes. 
17. In connection with the offer and sale of the Prairie notes, Acri also did not 
tell the  Kenilworth  associate about:  the  KAM  Private  Fund’s  delinquent  loan  to  Praedium;  the 
financial difficulties of Praedium/Woodmar; and that Kenilworth would receive a commission for 
selling the Prairie notes. 
18. Acri  misappropriated  $41,250  of  the  Kenilworth  clients’  funds  that  were  
supposed to be used to develop Prairie. Specifically, Acri spent: $28,750 in repayment of other 
former  and  current  clients  and  fund  investors;  $7,500 in  partial  payment  of  a  settlement  of  a  
lawsuit   against   Acri;   and $5,000   to   pay   a   person   to purportedly   seek   a   loan   for   
Praedium/Woodmar. 
19. Kenilworth  received  $13,750  in  commissions  that  Acri  did  not  disclose  to  
the Prairie investors. Acri controlled the use of those funds.   
20. Acri also told investors that their investments in the Prairie notes would be 
secured by a security interest in real estate recorded by Praedium/Prairie. Acri took no action to 
ensure that such a recording occurred. 
Violations 
21. As  a  result  of  the  conduct  described  above,  Acri  willfully  violated  Section  
17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder which 
prohibit fraudulent conduct in the offer or sale of securities and in connection with the purchase or 
sale of securities.   
22. As a result of the conduct described above, Acri willfully violated Sections 
206(1) and 206(2) of the Advisers Act which prohibit fraudulent conduct by an investment adviser.  
 
 

 6 
IV.  
 In view of the foregoing, the Commission deems it appropriate, in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 
 Accordingly, pursuant to Section 8A of the Securities Act, Sections 4C, 15(b), and 21C of 
the Exchange Act, Sections 203(f) and 203(k) of the Advisers Act, Section 9(b) of the Investment 
Company  Act,  and  Rule  102(e)(1)(iii)  of  the  Commission’s  Rules  of  Practice,  it  is  hereby  
ORDERED that: 
A. Acri  cease  and  desist  from  committing  or  causing  any  violations  and  any  future  
violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 
thereunder, and Sections 206(1) and 206(2) of the Advisers Act. 
B. Acri be, and hereby is: 
barred   from   association   with   any   broker,   dealer,   investment   adviser, 
municipal  securities  dealer,  municipal  advisor,  transfer  agent, or  nationally  
recognized statistical rating organization; 
prohibited from serving or acting as an employee, officer, director, member 
of  an  advisory  board,  investment  adviser  or  depositor  of,  or  principal  
underwriter for, a registered investment company or affiliated person of such 
investment adviser, depositor, or principal underwriter;   
barred  from  participating  in  any  offering  of  a  penny  stock,  including:  
acting  as  a  promoter,  finder,  consultant,  agent  or  other  person  who  
engages  in  activities  with  a  broker,  dealer  or  issuer  for  purposes  of  the  
issuance or trading in any penny stock, or inducing or attempting to induce 
the purchase or sale of any penny stock; and 
denied  the  privilege  of  appearing  or  practicing  before  the  Commission  as  
an attorney. 
Any  reapplication  for  association  with any broker, dealer, investment adviser, municipal securities 
dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization by 
the  Respondent  will  be  subject  to  the  applicable  laws  and  regulations  governing  the  reentry  
process,  and  reentry  may  be  conditioned  upon  a  number  of  factors,  including,  but  not  limited  to,  
the  satisfaction  of  any  or  all  of  the  following:  (a)  any  disgorgement  ordered  against  the 
Respondent,  whether  or  not  the  Commission  has  fully  or  partially  waived  payment  of  such  
disgorgement;  (b)  any  arbitration  award  related  to  the  conduct  that  served  as  the  basis  for  the  
Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or 
not related to the conduct that served as the basis for the Commission order; and (d) any restitution 
order  by  a  self-regulatory  organization,  whether  or  not  related  to  the  conduct  that  served  as  the  
basis for the Commission order.  

 7 
C. Acri  shall,  within 14  days  of  the  entry  of  this  Order,  pay  disgorgement  of 
$55,000.00, prejudgment  interest  of  $4,478.96,  and  a  civil  money  penalty  in  the  amount  of  
$55,000.00 to the Securities and Exchange Commission. If timely payment is not made, additional 
interest  shall  accrue  pursuant  to  SEC  Rule  of  Practice  600 and/or 31  U.S.C.  3717,  as  applicable. 
Payment must be made in one of the following ways:   
(1) Acri  may  make  direct  payment  from  a  bank  account  via  Pay.gov  through  the  SEC  
website at http://www.sec.gov/about/offices/ofm.htm; or  
(2) Acri may  pay  by  certified  check,  bank  cashier’s  check,  or  United  States  postal  money  
order, made payable to the Securities and Exchange Commission and hand-delivered or 
mailed to:  
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
Payments  by  check  or  money  order  must  be  accompanied  by  a  cover  letter  identifying  Robert  C.  
Acri as the Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to: James A. Davidson, Assistant Regional 
Director, Division of Enforcement, Securities and Exchange Commission, 175 W. Jackson Blvd., 
Suite 900, Chicago, IL 60604.   
The  Commission  will  hold  funds  paid  in  this  proceeding  pending  a  decision  whether  the  
Commission,  in  its  discretion,  will  seek  to  distribute  funds  or  transfer  them  to  the  United States 
Treasury.   
The Commission may distribute civil money penalties collected in this proceeding if, in its 
discretion, the Commission orders the establishment of a Fair Fund pursuant to Section 308(a) of 
the  Sarbanes-Oxley  Act  of  2002  (“Fair  Fund  distribution”).  Regardless  of  whether  any  such  Fair  
Fund  distribution  is  made,  amounts  ordered  to  be  paid  as  civil  money  penalties  pursuant  to  this  
Order  shall  be  treated  as  penalties  paid  to  the  government  for  all  purposes,  including  all  tax  
purposes. To  preserve  the  deterrent  effect  of  the  civil  penalty,  Acri  agrees  that  in  any  Related  
Investor Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction 
of  any  award  of  compensatory  damages  by  the  amount  of  any  part  of  Acri’s  payment  of  a  civil  
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such a  
 
[remainder of this page intentionally left blank] 
 
 
 

 8 
Penalty  Offset,  Acri  agrees  that  he  shall,  within  30  days  after  entry  of  a  final  order  granting  the  
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 
Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a payment 
shall  not  be  deemed  an  additional  civil  penalty  and  shall  not  be  deemed  to  change  the  amount  of  
the  civil  penalty  imposed  in  this  proceeding.  For  purposes  of  this  paragraph,  a  “Related  Investor  
Action”  means  a  private  damages  action  brought  against  Acri  by  or  on  behalf  of  one  or  more  
investors  based  on  substantially  the  same  facts  as  alleged  in  the  Order  instituted  by  the  
Commission in this proceeding. 
 By the Commission. 
 
 
       Jill M. Peterson 
       Assistant Secretary 

UNITED STATES OF AMERICA 
Before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES ACT OF 1933 
Release No. 9599 / June 11, 2014 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 72370 / June 11, 2014 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 3854 / June 11, 2014 
 
INVESTMENT COMPANY ACT OF 1940 
Release No. 31077 / June 11, 2014 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-15926 
 
In the Matter of 
 

ROBERT C. ACRI  
 
Respondent. 

ORDER INSTITUTING PUBLIC 
ADMINISTRATIVE AND CEASE-AND-
DESIST PROCEEDINGS, PURSUANT TO 
SECTION 8A OF THE SECURITIES ACT 
OF 1933, SECTIONS 4C, 15(b), AND 21C 
OF THE SECURITIES EXCHANGE ACT 
OF 1934, SECTIONS 203(f) AND 203(k) OF 
THE INVESTMENT ADVISERS ACT OF 
1940, SECTION 9(b) OF THE 
INVESTMENT COMPANY ACT OF 1940, 
AND RULE 102(e)(1)(iii) OF THE 
COMMISSION’S RULES OF PRACTICE 
MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 

 

I.  

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”), Sections 4C, 
15(b), and 21C of the Securities Exchange Act of 1934 (“Exchange Act”), Sections 203(f) and 
203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), Section 9(b) of the Investment 
Company Act of 1940 (“Investment Company Act”), and Rule 102(e)(1)(iii) of the Commission’s 
Rules of Practice against Robert C. Acri (“Acri” or “Respondent”). 

 



 2 

II.  

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Public Administrative and 
Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act, Sections 4C, 15(b), 
and 21C of the Securities Exchange Act of 1934, Sections 203(f) and 203(k) of the Investment 
Advisers Act of 1940, Section 9(b) of the Investment Company Act of 1940, and Rule 
102(e)(1)(iii) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial 
Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   

III.  

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that 

Summary 

 These proceedings arise out of fraud by an investment adviser in connection with the offer 
and sale of promissory note securities. Between April and September 2011, Acri, as the controlling 
managing member of Commission-registered investment adviser Kenilworth Asset Management 
LLC (“Kenilworth”), defrauded Kenilworth’s investment advisory clients in the offer and sale of 
$240,000 in promissory note securities of Prairie Common Holdings LLC (“Prairie”). Acri told 
clients that their funds would be used in the development of a retail parcel located near Hammond, 
Indiana, and that their investments would be secured by real estate. Acri, however, misappropriated 
$41,250 of the total proceeds, and the investments were never secured. Acri also failed to disclose 
material information to advisory clients concerning: (1) a conflict of interest arising from his 
motivation to engage in the offering to help other Kenilworth advisory clients recover on a prior, 
delinquent $500,000 loan to Praedium Development Corporation (“Praedium”), Prairie’s 
developer; (2) the distressed financial condition of the real estate development project of which 
Prairie was a part, Praedium, and a Praedium principal; and (3) the five percent commission 
Kenilworth would receive on sales of the securities, which totaled $13,750. Based on these actions, 
Acri willfully violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and 
Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act. 

 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding. 

 

 



 3 

Respondent 

1. Robert C. Acri is 57 years old and a resident of Winnetka, Illinois. Acri was 
the founder, co-owner, and manager of Kenilworth Asset Management LLC, an investment adviser 
registered with the Commission. In July 2012, Acri resigned as a principal and his ownership of 
Kenilworth was terminated. Acri was also the founder and manager of the KAM Private Fund, 
LLC, a private pooled investment vehicle not registered with the Commission. From January 2010 
through June 2011, Acri was also associated with a broker-dealer registered with the Commission. 
Acri is also an attorney licensed to practice in Illinois. 

Other Relevant Entities 

2. Kenilworth Asset Management LLC, an Illinois limited liability company 
formed on March 27, 2002, is an investment adviser registered with the Commission since February 
25, 2011. Kenilworth’s principal place of business is in Kenilworth, Illinois.  

3. KAM Private Fund, LLC (“KAM Private Fund”), an Illinois limited 
liability company formed on November 23, 2004, was a private pooled investment vehicle not 
registered with the Commission. KAM Private Fund’s principal place of business was in 
Kenilworth, Illinois, and although it was administratively dissolved by the State of Illinois on May 
11, 2007, Acri continued to operate it until approximately June 2012. 

4. Praedium Development Corporation, an Illinois corporation formed on 
December 30, 1998, is in the business of real estate development and is not registered with the 
Commission. Praedium’s principal place of business is in Northbrook, Illinois. 

5. Woodmar Hammond, LLC (“Woodmar”), an Illinois limited liability 
company affiliated with Praedium and formed on January 19, 2005, was formed to hold a real estate 
investment located near Hammond, Indiana, and is not registered with the Commission. Woodmar, 
whose principal place of business was in Northbrook, Illinois, was involuntarily dissolved on July 
12, 2013. 

6. Prairie Common Holdings LLC, an Illinois limited liability company 
affiliated with Praedium and formed on January 27, 2011, was formed to hold a real estate 
investment located near Hammond, Indiana, and is not registered with the Commission. Prairie’s 
principal place of business is in Northbrook, Illinois. 

Facts 

7. In 2011, Acri controlled Kenilworth, a Commission-registered investment 
adviser. Acri, as Kenilworth’s founder and one of its managing members, controlled its bank 
accounts, hired its employees, and made significant decisions concerning the investments it offered 
to its clients and its policies and practices.  

8. In January 2005, Acri, as adviser to the KAM Private Fund in which several 
Kenilworth clients were or later became investors, invested $500,000 of the fund’s assets in a one-
year promissory note bearing 15% interest and issued by Praedium, a real estate development 
company controlled by Acri’s friend (“the Praedium principal”) and one other person. The purpose 



 4 

of the Praedium note investment was to provide funds to Praedium for use with Woodmar, an 
entity created by Praedium to redevelop a retail shopping center near Hammond, Indiana.  

9. As the Woodmar project struggled to move forward, Praedium failed to 
make any payments on its $500,000 promissory note issued to the KAM Private Fund. The 
economic and real estate downturn of 2008-09 further increased Praedium’s/Woodmar’s financial 
distress by making it difficult for Praedium/Woodmar to secure leases from prospective tenants 
and to obtain necessary financing, including the promised tax increment financing (TIF) from the 
City of Hammond upon which the economic viability of the project depended. As a result, 
Praedium/Woodmar became delinquent on a mortgage, the payment of its property taxes, and the 
payment to some of its contractors. 

10. As a potential way forward, Praedium developed a plan wherein two 
smaller parcels would be separated from the Woodmar project and developed so as to create equity 
in the larger Woodmar project and demonstrate that progress was being made overall. To 
accomplish this plan, Praedium created two new companies, including Prairie Common Holdings, 
to own and develop the two smaller parcels. 

 
11. Because Praedium required financing to advance the Prairie project but was 

unable to obtain it from banks and other traditional lenders, the Praedium principal turned to Acri 
for assistance in finding investors to supply the necessary funds. 

 
12. In early 2011, Acri decided to raise funds for Prairie from Kenilworth’s 

clients. One of Acri’s primary purposes for selling Prairie promissory notes to Kenilworth clients 
was to give other Kenilworth clients (i.e., those who had invested in the KAM Private Fund) a 
chance to recover on their earlier investment in Praedium.  

 
13. Acri and the Praedium principal agreed that Kenilworth would receive a 

five percent commission on the sales of Prairie promissory notes. 

14. From approximately April 2011 through September 2011, Acri and a 
Kenilworth associate offered and sold a total of $240,000 in Prairie promissory notes to six 
Kenilworth clients. Acri drafted these notes, which bore a 15% annual interest rate and stated 
maturities of approximately 6 to 8 months.  

15. In his offer and sale of the Prairie promissory notes, Acri told Kenilworth 
clients that their funds would be used in the development of a retail parcel located near Hammond, 
Indiana. 

16. In his offer and sale of the Prairie promissory notes, Acri knowingly failed 
to tell Kenilworth clients the following material facts:  

• Kenilworth clients and others, through the KAM Private Fund, loaned 
$500,000 to Praedium for the development of Woodmar in 2005; 

• the KAM Private Fund had not been paid anything by Praedium on this 
loan; 



 5 

• that a primary purpose for the selling of the Prairie notes to Kenilworth 
clients was to give other Kenilworth clients (i.e., those who had invested in 
the KAM Private Fund) a chance to recover on their earlier investment in 
Praedium; 

• Praedium/Woodmar had been delinquent in the payment of its mortgage, 
property taxes, and some contractor invoices;  

• Praedium was also the developer of the Prairie project; 

• the Praedium principal was Acri’s personal friend and was also having 
financial difficulties; and 

• Kenilworth would receive a five percent commission on the sale of the 
Prairie notes. 

17. In connection with the offer and sale of the Prairie notes, Acri also did not 
tell the Kenilworth associate about: the KAM Private Fund’s delinquent loan to Praedium; the 
financial difficulties of Praedium/Woodmar; and that Kenilworth would receive a commission for 
selling the Prairie notes. 

18. Acri misappropriated $41,250 of the Kenilworth clients’ funds that were 
supposed to be used to develop Prairie. Specifically, Acri spent: $28,750 in repayment of other 
former and current clients and fund investors; $7,500 in partial payment of a settlement of a 
lawsuit against Acri; and $5,000 to pay a person to purportedly seek a loan for 
Praedium/Woodmar. 

19. Kenilworth received $13,750 in commissions that Acri did not disclose to 
the Prairie investors. Acri controlled the use of those funds.   

20. Acri also told investors that their investments in the Prairie notes would be 
secured by a security interest in real estate recorded by Praedium/Prairie. Acri took no action to 
ensure that such a recording occurred. 

Violations 

21. As a result of the conduct described above, Acri willfully violated Section 
17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder which 
prohibit fraudulent conduct in the offer or sale of securities and in connection with the purchase or 
sale of securities.   

22. As a result of the conduct described above, Acri willfully violated Sections 
206(1) and 206(2) of the Advisers Act which prohibit fraudulent conduct by an investment adviser.  

 

 



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IV.  

 In view of the foregoing, the Commission deems it appropriate, in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 

 Accordingly, pursuant to Section 8A of the Securities Act, Sections 4C, 15(b), and 21C of 
the Exchange Act, Sections 203(f) and 203(k) of the Advisers Act, Section 9(b) of the Investment 
Company Act, and Rule 102(e)(1)(iii) of the Commission’s Rules of Practice, it is hereby 
ORDERED that: 

A. Acri cease and desist from committing or causing any violations and any future 
violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 
thereunder, and Sections 206(1) and 206(2) of the Advisers Act. 

B. Acri be, and hereby is: 

barred from association with any broker, dealer, investment adviser, 
municipal securities dealer, municipal advisor, transfer agent, or nationally 
recognized statistical rating organization; 

prohibited from serving or acting as an employee, officer, director, member 
of an advisory board, investment adviser or depositor of, or principal 
underwriter for, a registered investment company or affiliated person of such 
investment adviser, depositor, or principal underwriter;   

barred from participating in any offering of a penny stock, including: 
acting as a promoter, finder, consultant, agent or other person who 
engages in activities with a broker, dealer or issuer for purposes of the 
issuance or trading in any penny stock, or inducing or attempting to induce 
the purchase or sale of any penny stock; and 

denied the privilege of appearing or practicing before the Commission as 
an attorney. 

Any reapplication for association with any broker, dealer, investment adviser, municipal securities 
dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization by 
the Respondent will be subject to the applicable laws and regulations governing the reentry 
process, and reentry may be conditioned upon a number of factors, including, but not limited to, 
the satisfaction of any or all of the following: (a) any disgorgement ordered against the 
Respondent, whether or not the Commission has fully or partially waived payment of such 
disgorgement; (b) any arbitration award related to the conduct that served as the basis for the 
Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or 
not related to the conduct that served as the basis for the Commission order; and (d) any restitution 
order by a self-regulatory organization, whether or not related to the conduct that served as the 
basis for the Commission order.  



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C. Acri shall, within 14 days of the entry of this Order, pay disgorgement of 
$55,000.00, prejudgment interest of $4,478.96, and a civil money penalty in the amount of 
$55,000.00 to the Securities and Exchange Commission. If timely payment is not made, additional 
interest shall accrue pursuant to SEC Rule of Practice 600 and/or 31 U.S.C. 3717, as applicable. 
Payment must be made in one of the following ways:   

(1) Acri may make direct payment from a bank account via Pay.gov through the SEC 
website at http://www.sec.gov/about/offices/ofm.htm; or  

(2) Acri may pay by certified check, bank cashier’s check, or United States postal money 
order, made payable to the Securities and Exchange Commission and hand-delivered or 
mailed to:  

Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 

Payments by check or money order must be accompanied by a cover letter identifying Robert C. 
Acri as the Respondent in these proceedings, and the file number of these proceedings; a copy of 
the cover letter and check or money order must be sent to: James A. Davidson, Assistant Regional 
Director, Division of Enforcement, Securities and Exchange Commission, 175 W. Jackson Blvd., 
Suite 900, Chicago, IL 60604.   

The Commission will hold funds paid in this proceeding pending a decision whether the 
Commission, in its discretion, will seek to distribute funds or transfer them to the United States 
Treasury.   

The Commission may distribute civil money penalties collected in this proceeding if, in its 
discretion, the Commission orders the establishment of a Fair Fund pursuant to Section 308(a) of 
the Sarbanes-Oxley Act of 2002 (“Fair Fund distribution”). Regardless of whether any such Fair 
Fund distribution is made, amounts ordered to be paid as civil money penalties pursuant to this 
Order shall be treated as penalties paid to the government for all purposes, including all tax 
purposes. To preserve the deterrent effect of the civil penalty, Acri agrees that in any Related 
Investor Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction 
of any award of compensatory damages by the amount of any part of Acri’s payment of a civil 
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such a  

 

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Penalty Offset, Acri agrees that he shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 
Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a payment 
shall not be deemed an additional civil penalty and shall not be deemed to change the amount of 
the civil penalty imposed in this proceeding. For purposes of this paragraph, a “Related Investor 
Action” means a private damages action brought against Acri by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 

 By the Commission. 

 

 

       Jill M. Peterson 
       Assistant Secretary