SEC Sues Calif. Investment Adviser Over $14M In Startup Fees

Law360 (August 14, 2019, 6:51 PM EDT) -- The U.S. Securities and Exchange Commission has sued California investment advisory company Frost Management Co. LLC and its principal, Stuart Frost, saying they defrauded client venture capital funds and their investors out of over $14 million via undisclosed fees charged to startups.

The agency said Tuesday that from 2012 through 2016, Orange County-based Frost Management and its owner, Frost, 57, raised nearly $63 million for the venture capital funds and invested it in a portfolio of startups. The nascent companies paid incubator fees to a Frost-owned company called Frost Data Capital, ostensibly for operational support and other services.

But the SEC...

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