December 17, 2012 / 7:00 PM / in 5 years

Aladdin Capital to pay $1.6 mln to resolve SEC charges

Dec 17 (Reuters) - Aladdin Capital Management and its broker-dealer agreed to pay more than $1.6 million to settle charges it falsely told clients it would co-invest in two financial products, the U.S. Securities and Exchange Commission said.

Aladdin, an investment adviser, said in marketing material that it had “skin in the game” in two collateralized debt obligations, even though it did not invest in the products, the SEC said on Monday.

The Connecticut-based firm continued from 2007 to 2010 to erroneously tell clients that it was investing in the products alongside them, the SEC said.

Regulators also said former executive Joseph Schlim agreed to pay a $50,000 penalty to settle charges related to his role, which the SEC said included making sales calls to potential clients.

Lawyers for Aladdin and Schlim could not immediately be reached for comment.

Aladdin and Schlim neither admitted nor denied the charges, the SEC said.

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