A private equity real estate principal has been barred from the industry by the Securities and Exchange Commission for taking unauthorized personal loans from the funds his firm managed.
The Financial Industry Regulatory Authority uncovered the loans, taken by former Janco Partners CEO Jan Helen, during an examination of the Janco Energy Partners II and III fund documentation. FINRA staff found discrepancies between bank statements and the firm’s general ledger.
The agency concluded Helen had “misappropriated investor funds from [the funds]” between April 2014 and May 2015. In total, Helen was found to have taken at least $85,000 in unauthorized personal loans from the fund. Although the loans were repaid, the SEC asserts potential harm to investors.
“Due to [the] Respondent's misappropriation, investor funds were not available for their stated purpose of funding oil and gas drilling operations,” the SEC said in a filing.
According Cipperman Compliance Services, the chances of being caught for such a violation are much higher in this environment because examiners are checking financial records and other transaction data.
“The SEC will come down hard on conflict-of-interest transactions where fund managers use invested assets as a personal piggy bank. In this case, the respondent lost his entire business because of an $85,000 loan,” the firm said.
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