On February 3, John J. Carney, co-leader of Baker Hostetler’s national White Collar Defense and Corporate Investigations practice, was selected by the SEC and appointed by the U.S. District Court in Connecticut to serve as Receiver of Michael Kenwood Capital Management, LLC, an unregistered investment advisor located in Stamford, Connecticut. On March 1, 2011, the Court expanded the scope of the Receivership to include other affiliated entities, all of which were organized under the name of a Connecticut holding company, The Michael Kenwood Group, LLC. Baker Hostetler, under the leadership of Jonathan Barr, Jimmy Fokas, Patrick Hannon, Jonathan New and Ona Wang, was also appointed to serve as Counsel to the Receiver.
According to the SEC’s First Amended Complaint, the majority control owner and control person of the Michael Kenwood Entities, Francisco Illarramendi, improperly and illegally misappropriated investor assets and used the hedge funds he managed through MK Capital Management as “vehicles for Ponzi activity.” On March 7, 2011, the United States Department of Justice unsealed a parallel criminal action in which Illarramendi pled guilty to Securities Fraud, Wire Fraud, Investment Adviser Fraud and Conspiracy to Obstruct Justice.
George Stamboulidis, New York Managing Partner, noted, “This appointment is further evidence of the government’s continuing recognition of the extensive experience the firm possesses in conducting cutting edge white collar and securities investigations and litigation.”
Prior to joining the firm, Carney served as the Chief of the Securities and Health Care Fraud Unit for the Office of the United States Attorney for the District of New Jersey and for more than 14 years, he served as Senior Counsel for the U.S. Department of Justice and the U.S. Securities and Exchange Commission.