December 20, 2010
ó The Securities and Exchange Commission charged Jonathan Star Bristol,
attorney for former financial advisor Kenneth Ira Starr, with aiding and
abetting Starr's multi-million dollar fraud by allowing Starr to use his
attorney trust accounts as conduits when Starr stole money from advisory
The SEC alleges
that more than $25 million belonging to Starr's clients flowed through
Bristol's attorney trust accounts. Without his
clients' authorization, Starr would transfer their funds into the
attorney trust accounts, and then Bristol would transfer the
stolen funds to Starr and his two companies for personal use.
alleges that Bristol
never disclosed the existence of the attorney trust accounts to the
prominent international law firm where he worked at the time.
Monthly account statements clearly listing the names of Starr's
clients as the source of the incoming transfers were sent directly
home address instead of the law firm. Meanwhile, Bristol touted his relationship with Starr to
his colleagues and others, claiming that Starr managed $70 billion
in assets. In fact, Starr managed only a fraction of that amount.
had a legal and professional responsibility not to assist Ken Starr in
conduct that he knew was unlawful," said George S. Canellos, Director of
the SEC's New York Regional Office. "Bristol crossed the line from
lawyer to conspirator when he failed to safeguard funds entrusted to
him, helped Starr steal client money, and lied to the victims to
perpetuate the scheme."
The SEC previously
charged Starr, Starr Investment Advisors LLC, and Starr & Company LLC
with violating securities laws pertaining to custody of clients' assets
and misusing client funds to buy a multi-million dollar luxury
condominium on Manhattan's
Upper East Side among other things.
The SEC's amended
complaint, filed today in federal court in Manhattan,
as a defendant, alleging that beginning around November 2008 and
continuing until Starr's arrest in May 2010,
repeatedly allowed Starr to use his attorney trust accounts to funnel
money stolen from Starr clients. Notwithstanding his personal role in
the scheme, Bristol represented Starr
and his companies throughout the SEC's investigation and in an
investment advisory examination by SEC staff.
According to the
SEC's amended complaint, Bristol was confronted by
one of Starr's victims about an unauthorized $1 million transfer from
the victim's account. Bristol
lied to the victim that the funds were being bundled with other clients'
funds for an investment with UBS Financial Services.