SEC Charges Investment Adviser Linked to Russian Oligarch Roman Abramovich
Concord Management invested billions of dollars on behalf of its sole client, the SEC says
New York-based investment adviser Concord Management and its owner face Securities and Exchange Commission charges for operating as an unregistered investment adviser to a single client, a wealthy Russian with connections to the Russian government.
Concord allegedly invested billions of dollars from at least 2012 through March 2022 on behalf of its sole wealthy Russian client without registering with the SEC, the agency said Tuesday. The agency didn’t name the client, but Concord Management has been linked to Roman Abramovich, a Russian oligarch with ties to Russian President Vladimir Putin. Last year, U.S. hedge-fund firms that had investments from Abramovich were told to freeze his assets after the British government placed sanctions on him.
The charges are an unusual example of the SEC’s involvement in the expansive sanctions and export control regime that the U.S. and its allies imposed on Russia following its 2022 invasion of Ukraine. The SEC normally polices investment advisers to help protect the public, but Concord only managed the money of a single client.
SEC enforcement head Gurbir Grewal said that Concord Management’s failure to register as an adviser “skirted rules crucial to the commission’s ability to monitor the market for abuse.”
The SEC doesn’t have a direct role in enforcing sanctions violations, but prominently noted Concord’s work for a client who was targeted by sanctions last year in its announcement of the action.
A spokesperson for Concord Management and its owner Michael Matlin expressed disappointment with the SEC’s decision to charge, but added that “we are confident that a full and fair review of the applicable law and relevant facts will underscore that Concord Management and Michael Matlin complied with all regulatory and legal requirements.”
A spokesperson for Abramovich didn’t immediately respond to a request for comment.
Between 2012 and at least 2022, the firm employed about 10 staffers, most of whom were serving as investment analysts, the SEC alleges, but most weren’t made aware of who the sole client was. Concord staff allegedly became aware over time of the identity of the client, but with limited visibility regarding the beneficiary of the funds being managed they typically described the firm to outside parties as a fund of funds or a family office for high-net-worth European individuals, according to the complaint.
The SEC said that while most of the investments were made in hedge funds, Concord allegedly invested in at least six private-equity funds, and provided supervision and management services, including due diligence and investment negotiations, investment execution and portfolio monitoring.
As of January 2022, Concord allegedly managed investments in 112 different private funds for the client with an estimated total value of $7.2 billion, according to the SEC.
The SEC also alleged that a month before the U.K. and European Union designated the client as a sanctioned individual in March 2022 and froze the client’s assets, Concord and Matlin aided the client in attempts to sell off his investment portfolio.
“We allege that Concord flouted the registration requirements of the federal securities laws for over a decade, earning more than $80 million for providing investment advice to its billionaire client during that time,” said Grewal.