U.S. authorities have charged a former asset management executive with fraud, alleging that he embezzled millions from his firm and its clients.
The U.S. attorney’s office for Southern District of New York announced that Richard Diver, former chief operating officer with an unnamed firm in New York, has been arrested and charged with fraud. The allegations have not been proven.
The charges stem from allegations that Diver fraudulently diverted millions from the firm’s payroll to his personal accounts, and that he overbilled clients for US$750,000 in inflated management fees and routed those funds to his personal account too.
Separately, the U.S. Securities and Exchange Commission (SEC) filed its own charges against Diver in federal district court in Manhattan. The SEC is seeking disgorgement and civil monetary penalties against Diver.
“Richard Diver occupied a position of great responsibility and great trust at the asset management company that employed him. As alleged, he betrayed that trust, stealing from the company and defrauding its clients, all to fund his lavish personal spending,” Geoffrey Berman, U.S. attorney for the Southern District of New York, said in a statement.
“As alleged, Diver lined his own pockets by stealing from hundreds of advisory clients, until his scheme was exposed by an investor who asked the right questions about charged fees,” said Marc Berger, director of the SEC’s New York office.