Cleaning Up Real Estate Fund Failures Still Keeping SEC Enforcers Busy, Years After The Crash
- Created: Sunday, 15 May 2011 22:22
Lloyd Barringer appears to have run two unregistered funds that focused on lending to real estate developers. He was not SEC-registered as an RIA himself, but his firm, Barringer & Barringer, was a licensed broker-dealer.
Naturally, as the construction industry reeled in 2007 and into 2008, the high-interest collateralized loans in one of the portfolios in particular started to default on their payments.
When the situation got desperate, Barringer allegedly shored up the fund by pulling $2.5 million out of his second fund -- a tiny portfolio that only ever raised $12 million from his clients.
So far, this is not really news. But Barringer effectively gave up way back in March 2008 and halted redemptions and withdrawals from the troubled fund.
Barringer & Barringer itself finally shut down in January of this year.
It's taken the SEC three years to move to close this case. The charitable explanation is that when the market tides went out in 2008, they revealed that a lot of advisors had been swimming in dangerous waters -- and it's taken the SEC this long to work its way around to reeling them all in.
Otherwise, we have to admit that the SEC is just slow.
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