SEC Charges New York Firm Concord Management and Owner with Acting as Unregistered Investment Advisers to Billionaire Former Russian Official

The Securities and Exchange Commission (SEC) has announced charges against Concord Management LLC, based in Tarrytown, New York, and its owner and principal, Michael Matlin. The charges stem from their operation as unregistered investment advisers, catering solely to a wealthy former Russian official known for his political ties to the Russian Federation.

According to the SEC’s complaint, Matlin established Concord in 1999 with the purpose of providing compensated investment advice and overseeing the client’s investments in U.S.-based private funds. The SEC alleges that from at least 2012 through March 2022, Concord and Matlin actively sourced, arranged, and monitored numerous investments totaling billions of dollars in private equity funds and hedge funds on behalf of their client. Despite their activities clearly requiring registration as investment advisers with the SEC, neither Concord nor Matlin did so. By avoiding registration, they sidestepped various legal obligations imposed on investment advisers, designed to protect the interests of investors, including reporting requirements and SEC examinations. As of January 2022, Concord and Matlin purportedly managed an estimated $7.2 billion across 112 different private funds, all on behalf of their sole client.

The complaint notes that in March 2022, the United Kingdom and the European Union designated Matlin and the client as sanctioned individuals, leading to the freezing of the client’s assets. The SEC alleges that in February 2022, Concord and Matlin assisted the client in redeeming investments and selling his securities portfolio.

Gurbir S. Grewal, Director of the Division of Enforcement, stated, “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. By failing to register as an investment adviser, Concord not only undermined the Commission’s ability to exercise effective regulatory oversight over billions its client invested in the United States but also skirted rules crucial to the Commission’s ability to monitor the market for abuse, including rules requiring investment advisers to adopt specific compliance policies and to maintain certain books and records.”

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Concord and Matlin with violating Section 203(a) of the Investment Advisers Act of 1940 by failing to register as investment advisers with the Commission. The SEC seeks injunctive relief, disgorgement with prejudgment interest, and civil penalties.