The Commission says that Theorum provided administration services to EIA All Weather Alpha Fund Partners and Andrew M. Middlebrooks, both of whom are subject to proceedings brought by the Commission alleging fraud including "the misappropriation and misuse of investors’ funds over a five-year period. "

According to the Commission " during Theorum’s engagement, the fund suffered significant losses as a result of trading by EIA and Middlebrooks; however, Theorum, at the direction of EIA and Middlebrooks, calculated the Net Asset Value, which did not recognise the losses and sent investors account statements that materially overstated the value of their investments.

Even worse, the Commission determined that Theorum was a cause of certain of breaches of the Securities Act 1933 and other legislation by EIA and Middlebrook.

“Fund administrators are important gatekeepers in private funds,” said Andrew Dean, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “Here, Theorum failed to live up to its gatekeeper responsibilities and distributed inaccurate account statements to investors despite clear indicators of risk.” (edited)

Theorum has agreed, without admitting or denying the Commission’s findings, to a cease-and-desist order and to pay a civil penalty of USD100,000. In addition, the company has agreed to surrender USD18,000 and prejudgment interest of USD4,271.