WHOA! Mark, thanks for picking that up! Sorta confirms my general thoughts about these guys. So as to save the trouble of clicking on the link I'm posting the Notice here:
SEC News Digest
Issue 97-166 August 27, 1997
ENFORCEMENT PROCEEDINGS
IN THE MATTER OF HUDSON INVESTORS FUND, INC., HUDSON ADVISERS,
INC., JAVED LATEF AND LARRY STOCKETT
Administrative and cease-and-desist proceedings have been
instituted pursuant to Section 8A of the Securities Act of
1933, Section 2lC of the Securities Exchange Act of 1934,
Sections 9(b), 9(d) and 9(f) of the Investment Company Act and
Sections 203(e), 203 (f), 203(i) and 203(k) of the Investment
Advisers Act against Hudson Investors Fund, Inc. (Hudson
Fund) of Clifton, New Jersey; Hudson Advisers, Inc. (Hudson
Advisers) and Javed Anver Latef (Latef) of Ridgewood, New
Jersey; and Larry Alan Stockett (Stockett) of Tiburon,
California.
The Order Instituting Proceedings alleges that Neuropro, Inc.
(Neuropro), a company controlled by Stockett, entered into
undisclosed agreements with Hudson Advisers, the adviser to
Hudson Fund, a registered investment company which operates a
growth mutual fund, and Hudson Investment Management, Inc.
(HIM), the management company to Hudson Advisers. Latef was
the president of Hudson Fund, Hudson Advisers and HIM and
signed all the undisclosed agreements for those entities. It
is alleged that the agreements gave Neuropro options to
purchase Hudson Advisers and HIM for nominal payments and
assigned Neuropro 90% of the fees due Hudson Advisers from
Hudson Fund in exchange for certain advisory services to be
provided to Hudson Advisers by Neuropro. The agreements also
provided that Neuropro would pay Hudson Advisers up to $10,000
per month to cover fees owed Hudson Advisers by Hudson Fund.
The Order Instituting Proceedings also alleges that shortly
after such agreements were executed, Hudson Advisers purchased
stock in two issuers of which Stockett was president and in
several other entities recommended by Stockett and Neuropro.
It is alleged that by June 1997 over half of Hudson Fund's
portfolio was invested in securities recommended by Neuropro
and Stockett.
It is alleged that the failure of Hudson Fund, Hudson
Advisers, Latef and Stockett to disclose the agreements with
Neuropro and Stockett and the failure to disclose that
Stockett recommended many of the securities purchased for
Hudson Fund's portfolio, including some in which he had an
interest, violated Sections 15(a), 15(c) and 34(b) of the
Investment Company Act, Sections 203(a), 204 and 207 of the
Investment Advisers Act and Rule 204-1(b) thereunder, Section
17(a) of the Securities Act and Section 10(b) of the Exchange
Act and Rule l0b-5 thereunder.
A public hearing will be scheduled to determine whether the
allegations against Hudson Fund, Hudson Advisers, Latef and
Stockett are true and, if so, what sanctions, if any, are
appropriate in the public interest with respect to those
respondents. (Rels. 33-7440; 34-38976; IC-22799; IA-1651) |
