SEC Halts $23 Million Investment Fraud, Broker-Dealer Charged

A Philadelphia-area investment advising firm and its principle owner have been charged by the Securities and Exchange Commission with misusing up to $23 million in investor dollars through a Ponzi scheme.

The assets of Acorn Capital Management, LLC and broker Donald Anthony Walker Young of Coatesville, Pa. have been frozen as the SEC investigates the alleged fraud. Young and the firm are accused of lying to investors about the value of their investments and stealing money to buy a Florida vacation home, pay personal expenses, and fund lavish costs including thoroughbred race horses, boats, limousines, and charter airplanes.

Phony Account Statements Alleged

Young is accused of providing SEC investigators with phony client files, account statements, and balance sheets as part of the investigation. U.S. District Court Judge John R. Padova recently issued an order granting a temporary restraining order over accounts managed by Acorn and Young. The assets were frozen in an effort to retain them for eventual repayment to defrauded investors and creditors.

Millions Stolen From Investors

Young, a licensed broker-dealer, established Acorn II LP in 2001 and maintained nearly complete control over the investment advising firm, the SEC said. Young is accused of promising investors strong returns on their investments while pocketing millions of dollars. The Acorn II LP account he managed holds about $3 million for about 40 investors, but Young claimed that the fund contained much more, the SEC said.

He is accused of violating federal securities laws and the SEC is seeking return of the illegally obtained client funds, fines, and permanent injunctions to bar future violations of federal laws. The SEC said it is continuing to investigate the case against Young and Acorn Capital Management, LLC.

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