A Rockland County investment manager who oversaw $7.2 billion in assets for a sanctioned Russian oligarch has been accused of securities violations.
The U.S. Securities and Exchange Commission sued Michael Matlin, of Airmont, and Concord Management LLC, of Tarrytown, in a complaint filed Sept. 19 in U.S. District Court, White Plains.
The SEC claims that Matlin and Concord failed to register as investment advisers, thereby undermining the agency’s ability to regulate them.
In response to a request for comment, their spokesman, Jon Hammond, stated in an email: “While we are disappointed with the SEC’s decision to pursue this non-intent-based claim, we are confident that a full review of the applicable law and relevant facts will underscore that Concord Management and Michael Matlin complied with all regulatory and legal requirements.”
Matlin, 59, formed Concord Management in 2009, according to the complaint, and from at least 2012 to 2022 served a single client, “a wealthy, former Russian political official living outside the United States.”
Though the complaint does not identify the client, the circumstances described by the SEC point to Roman Abramovich.
Abramovich was a governor in eastern Russia and allegedly amassed a fortune from selling privatized Russian assets he acquired after the collapse of the Soviet Union.
After Russia invaded Ukraine last year, the United Kingdom and European Union sanctioned Abramovich and other Russian oligarchs close to Vladimir Putin and began seizing their assets.
Matlin was born in Russia, emigrated to the U.S. in 1988, and became a citizen. While still a student in Moscow, he met another individual who is a longtime associate of Abramovich and who is identified in the complaint as Person B. He also met another student, identified as Employee C, who became Concord’s head of operations and administration.
The SEC claims that Matlin and his friends coordinated investment decisions through companies based in the British Virgin Islands and the Bailiwick of Jersey.
Concord was given an open-ended mandate to identify and invest in hedge funds and private equity funds based primarily in the U.S., according to the SEC. As of January 2022, Concord was managing $7.2 billion in 112 private funds.
Eventually, about a dozen people worked for the firm and became aware of the client’s name, the SEC says. They were discouraged from discussing or speculating about the client, and they typically described the firm to outsiders as a family office for high net-worth Europeans.
In late 2021 and early 2022, as speculation circulated about a possible Russian invasion of Ukraine, Matlin and Concord began to liquidate their client’s assets, the complaint states. Around the same time, the client began transferring ownership of various entities that held the assets to five of his children.
Concord was paid about $85 million for its work, including $50 million in performance bonuses, $29 million in fees and $6 million in business expenses, according to the SEC. Matlin, Concord’s sole owner, received an annual salary and distributions of profits.
The SEC accused Matlin and Concord of violating the Investment Advisers Act of 1940. It is asking the court to restrain them from committing more securities violations, to disgorge ill-gotten gains, and to pay civil penalties.
The SEC is represented by several attorneys in its Boston regional office. Matlin and Concord are represented by Manhattan attorneys Benjamin S. Fischer and Christopher Harwood.
