SEC bans biotech visionary investor after a $17 million loot claimed by fund

Rick Steves

Ranked in the top 100 visionaries in Biotech by Scientific American more than once, Steven Burrill was ousted from control of a $283 million venture capital fund named after him, Burrill Life Sciences Capital Fund III, in March 2014. The fund, with investors such as the Treasury of the State of North Carolina, Oregon Investment […]

SEC bans biotech visionary investor after a $17 million loot claimed by fund

Ranked in the top 100 visionaries in Biotech by Scientific American more than once, Steven Burrill was ousted from control of a $283 million venture capital fund named after him, Burrill Life Sciences Capital Fund III, in March 2014.

The fund, with investors such as the Treasury of the State of North Carolina, Oregon Investment Fund, Unilever, Monsanto and Celgene, filed suit claiming Mr. Burrill, companies he ran and close colleagues looted more than $17 million between 2007 and 2013, in advance payments first, unauthorized by the Fund’s governing Second Amended and Restated Limited Partnership Agreement, and later with no excuses at all.

According to the SEC, the 71-year old investor used the stolen money on family vacations to Paris and St. Bart’s, jewelry from Tiffany & Co., gifts, private cars and jets. He neither admitted nor denied the charges.

The Securities and Exchange Commission has finally come to a decision and banned the former prominent Biotech investor from the securities industry. Steven Burrill and his San Francisco based firm Burrill Capital Management “agreed to pay $4.785 million in investor money he stole for personal use plus a $1 million penalty.

Burrill also agreed to be permanently barred from the securities industry.  The fund’s investors included state pension funds, public companies, and other institutional investors”, said the SEC statement.

Having been found guilty of playing integral roles in Burrill’s scheme, Burrill Capital Management’s chief legal officer Victor A. Hebert and controller Helena C. Sen were also barred by the SEC and agreed to pay penalties of $185,000 and $90,000, respectively.

“Gatekeepers play an essential role in every company.  Rather than take a stand for the fund’s investors, Hebert and Sen allowed Burrill’s scheme to perpetuate and their salaries were paid out of money Burrill misappropriated from investors,” said Jina Choi, Director of the SEC’s San Francisco Regional Office.

In spite of the announcement of settlements, the SEC will continue the investigation.

 

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