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ALJ Rules Atlanta Company And Principals Committed Fraud

Administrative Law Judge Cameron Elliot found that Timbervest LLC and its four principals committed fraud and ordered the group to disgorge nearly $2 million in illegal gains. Timbervest is an Atlanta company that manages over $1.2 billion in investments pertaining to timber. The SEC alleged that in 2006 and 2007, Timbervest's CEO, CIO, COO, and President received over $1 million in unauthorized, undisclosed real estate commissions paid out of the pension plan assets of Timbervest's biggest client.

The SEC alleges that the payments were arranged to hide that the group benefited financially from the unauthorized transactions. Finally, the SEC alleges that Timbervest and its principals operated the undisclosed and unauthorized sale of a timberland property from a fund holding that same client's pension assets to another investment fund that the firm managed. The company's representatives stated that Timbervest's client's representative ordered it to destroy almost half of its portfolio, and the sale was a direct consequence of that order. The client knew of the sale, and it was authorized.

Timbervest has denied the SEC's allegations and claims that there were no unauthorized transactions.