March 30, 2016 / 5:30 PM / 3 years ago

SEC fines, bans San Francisco biotech capitalist for theft

(Reuters) - A San Francisco biotechnology venture capitalist agreed to pay nearly $5.8 million to settle U.S. Securities and Exchange Commission charges he stole investor money to pay for vacations in St. Bart’s and Paris, Tiffany jewelry, private jets and other expenses.

G. Steven Burrill, 71, and his firm Burrill Capital Management LLC agreed to give up $4.785 million including interest that he siphoned for personal use, and pay a $1 million civil fine, the SEC said.

The firm’s former chief legal officer Victor Hebert, 78, and former controller Helena Sen, 62, agreed to pay respective $185,000 and $90,000 civil fines, the SEC said.

All of the individual defendants also accepted securities industry bans. None of the defendants admitted wrongdoing.

The SEC accused Burrill of having from December 2007 to August 2013 misappropriated $18 million under the guise of “advanced management fees” from Burrill Life Sciences Capital Fund III, a $283 million fund whose investors included state pension funds, public companies and other investors.

Burrill allegedly used the money to cover cash shortfalls in his other businesses, and support a “lavish lifestyle” including family vacations, gifts and other expenses, the SEC said.

The fund’s investment committee told investors about the misappropriation after discovering it in August 2013, the SEC said.

“Burrill spent his fund’s capital on whatever he pleased, and elevated his own interests above those of investors,” SEC enforcement chief Andrew Ceresney said. “Even though they are exempt from registration, venture capital advisers like Burrill have fiduciary obligations to their clients.”

Lawyers for Burrill and Sen did not immediately respond to requests for comment.

Michael Shepard, a lawyer for Hebert, said his client has been a lawyer for more than 50 years, and settled to put the investigation behind him.

Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy

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