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Regulators freeze assets of Costa Mesa investment firm

June 11, 2008|From Bloomberg News

U.S. securities regulators said Tuesday that they froze the assets of a Costa Mesa investment firm, claiming a convicted felon had overseen its efforts to raise more than $21 million since 2004.

A federal judge in Santa Ana issued the emergency order after the Securities and Exchange Commission sued Lincoln Funds International Inc. and three of its principals, the agency said.

The lawsuit accuses Robert Carver, 53, of hiding felony convictions while selling shares in the Costa Mesa firm and a predecessor, Brookstone Capital Inc.

Carver and his codefendants sold stakes in three biotechnology investment funds, from which they siphoned $2.5 million, the agency said.

In 1994, Carver pleaded guilty to one count of making or passing fictitious checks and no contest to two counts of grand theft, the SEC said. State regulators sanctioned him repeatedly over sales of unregistered securities, and in 2005 California barred him from working as an investment advisor, the SEC said.

Michael Donahue, a Los Angeles attorney who the SEC said is representing Carver, didn't immediately return a phone call seeking comment.

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