A group of investors including Greenwich-based Jeffrey E. Eberwein has agreed to pay the U.S. Securities & Exchange Commission a total of $420,000 in fines for failing to properly disclose ownership information during a series of five campaigns to influence or exert control over microcap companies.
Without admitting or denying the SEC’s findings, Eberwein agreed to pay $90,000, while his Lone Star Value Management firm, based in Old Greenwich, will pay another $120,000. Tulsa-based Charles M. Gillman will also pay a fine of $30,000.
The SEC maintains that Eberwein and Gillman collaborated with Milwaukee-based mutual fund adviser Heartland Advisors in campaigns where they collectively owned more than 5 percent and sometimes even more than 10 percent of the microcap companies’ outstanding common stock. The required ownership filings to disclose that information to the investing public were either incomplete, untimely or altogether absent. Heartland Advisors was fined $180,000 for its part in the scheme.
“Investors in these companies were deprived of key facts needed to make informed investment decisions,” said Gerald Hodgkins, associate director of the SEC Division of Enforcement. “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.”