UNITED STATES SECURTIES AND EXCHANGE COMMISSION
Litigation Release No. 17536 / May 28, 2002
, Criminal No. 00CR1292 (GEL) (S.D.N.Y. May 24, 2002)
, 00Civ.9680 (RO) (S.D. N.Y.)
MICHAEL L. SMIRLOCK, FORMER HEDGE FUND MANAGER, SENTENCED TO FOUR
YEARS AND ORDERED TO PAY $12.6 MILLION IN RESTITUTION FOR DEFRAUDING
INVESTORS
Recidivist Smirlock Was Subject To A Prior SEC Order and Sanction
On May 24, 2002, Michael L. Smirlock, the former President and CEO of
LASER Advisers, Inc., a Short Hills, New Jersey investment adviser
firm, was sentenced to four years incarceration and ordered to pay
$12.6 million in restitution to investors in three hedge funds managed
by Smirlock. Judge Gerard E. Lynch of the Federal District Court for
the Southern District of New York imposed the sentence.
Smirlock had pled guilty to two counts of securities fraud for
engaging in a complex scheme that falsely inflated the value of an
investment portfolio that Smirlock managed for the three hedge funds.
Simultaneous with Smirlock's criminal indictment, the SEC filed a
civil enforcement action against Smirlock and LASER Advisers, Inc. The
Commission charged, among other things, that Smirlock and LASER
Advisers, Inc. engaged in securities fraud by inflating the values
reported for certain thinly traded securities known as swaptions. The
Commission also charged Smirlock with violating a prior Commission
order described below. See, , Litigation Release No. 16838 (December
21, 2000). The SEC action against Smirlock, which was stayed pending
resolution of the criminal matter, remains pending.
In 1993, Smirlock was the subject of a prior SEC enforcement action.
In that settled administrative proceeding, the Commission ordered
Smirlock to cease and desist from committing or causing any future
violations of the antifraud and record keeping provisions of the
Investment Advisers Act of 1940. In its 1993 order, the SEC, among
other things, suspended Smirlock from the securities industry for
three months and ordered him to pay a $50,000 penalty. See Advisers
Act Release No. 1393 (November 29, 1993).
Smirlock's recidivism and violation of the Commission's prior order
were matters considered by Judge Lynch in imposing Smirlock's
sentence.
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SNIPPETS:
MICHAEL L. SMIRLOCK, FORMER HEDGE FUND MANAGER, SENTENCED TO FOUR YEARS AND ORDERED TO PAY
Recidivist Smirlock Was Subject To A Prior SEC Order and Sanction
Judge Gerard E. Lynch of the Federal District Court for the Southern District of New York
Smirlock had pled guilty to two counts of securities fraud for engaging in a complex scheme
Simultaneous with Smirlock's criminal indictment, the SEC filed a civil enforcement action
The Commission charged, among other things, that Smirlock and LASER Advisers, Inc. engaged in
The Commission also charged Smirlock with violating a prior Commission order described below.
See,, Litigation Release No. 16838.
The SEC action against Smirlock, which was stayed pending resolution of the criminal matter,
the Commission ordered Smirlock to cease and desist from committing or causing any future
In its 1993 order, the SEC, among other things, suspended Smirlock from the securities
Smirlock's recidivism and violation of the Commission's prior order were matters considered
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