The Colorado Division of Securities ordered a Florida hedge fund Tuesday to stop marketing investments in violation of state securities rules.
The Black Diamond Fund LLLP, a Minnesota limited liability partnership based in Florida, and its general manager, Wealth Strategy Partners, and Harvey Altholtz, both of Sarasota, Fla., were named in the cease and desist order. Altholtz directs and controls both entitites from offices in Sarasota.
Altholtz used at least five “finders” in Colorado to sell the interests, including William Alan Gay, who the division said is under a Denver District court order prohibiting him from selling securities in the state.
Gay said in an interview that he wasn’t selling securities but had invited Altholtz to present the investment opportunity to his clients who are accredited investors. He said friends and family of his clients were also invited by Altholtz, but they weren’t qualified to invest in a hedge fund.
State securities commissioner Fred Joseph said the investments weren’t registered and there were licensing issues with the people offering the investments.
Altholtz could not be reached for comment.
Investors in hedge funds must be accredited, defined as a net worth of $1 million or more or $200,000 a year in household income.
Black Diamond invests in PIPEs or private investments in public equity, which are used to fund small and medium-sized companies. The hedge fund was trying to raise $10 million.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
