The Securities and Exchange Commission is charging that Copley resident Anthony Davian defrauded investors of more than $1 million through his hedge fund business, Davian Capital Advisors LLC, calling the firm “Davian’s personal piggy bank.”
Davian, 34, was at his Richfield offices on Wednesday and declined comment as furniture was being taken out to a truck.
“Go have fun,” he said, before asking a reporter to leave the building at 4650 Streetsboro Road. Davian is being represented by criminal defense attorney Paul Adamson. Adamson could not be reached Wednesday.
Davian used social media, particularly Twitter, to promote himself and his funds. He also published a newsletter, The Davian Letter, which charged $69 to $99 a month for a subscription.
The SEC lawsuit, filed in U.S. District Court in Akron, seeks the return of investor funds plus penalties. The federal court also imposed a temporary restraining order and asset freeze at the SEC’s request. Also, on July 24, the U.S. Attorney’s Office filed a lawsuit in Cleveland seeking to seize Davian’s under-construction home at 4862 Dremina Rock Drive, also called Travertine Way, in Bath.
The SEC lawsuit said “Davian Capital is nothing more than Davian’s personal piggy bank. He has invested only some of his client’s funds. He has used the rest to finance construction of a luxury home for himself, and to buy himself a luxury car, among other things.”
The lawsuit alleges that Davian, through Davian Capital, has been engaged in the unregistered offer and sale of securities through his various private funds since at least June 2011. Davian created his firm in July 2008.
The SEC said that Davian promoted his firm and funds as providing high returns using profitable trading strategies.
“Such returns and profits were figments of Davian’s imagination,” the SEC lawsuit said. “In any event, unsuspecting potential investors apparently liked what they read. Since June 2011, Davian has raised at least $1.5 million from investors. Davian has misappropriated most of that money.”
The SEC lawsuit said Davian used investor money to buy an Audi Q7 luxury car and $25,000 to pay his personal attorney and to honor redemption requests.
The SEC also said that Davian pressured three brothers to bundle $225,000 and invest it in his funds and that if they acted fast “he would give them a break on his firm’s management fees.” Just after getting the money from the three brothers in early July, Davian on July 5 wired $225,000 to the contractor building his home in Bath, according to the SEC and U.S. District Attorney lawsuits.
Last month, the nonprofit Southern Investigative Reporting Foundation published a lengthy online story on Davian and Davian Capital. The story said that the fund “had come to a standstill after being besieged by fraud allegations from all directions” and that investors “suffered sharp losses.”
A lawyer representing Davian Capital, not Davian, acknowledged in July that the firm had turned over computer hard drives and other records to the U.S. Attorney’s Office and to the SEC.
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org.