Sentencing at the Courthouse
I recently had the opportunity to attend a sentencing at the Boston Courthouse for a case that the SEC brought against a local Investment Adviser.
Daniel Thibeault, graduate of HBS was the co-portfolio manager and CEO of a collection of companies including Graduate Leverage Beyond Income Fund (GL). GL is a mutual fund that targeted individuals who were “less susceptible to economic downturns, such as medical doctors, dentists, veterinarians, attorneys and business owners” and provided loans, as well as other services.
Late 2013, Thibeault issued a rash of loans at values of hundreds of thousands of dollars to personal friends and acquaintances. However, these individuals did not apply for the loans, and neither knew of the use of their information nor received compensation. The money related to these loans was diverted from the fund and into GL’s operating account where it was used to cover company and personal expenses. Over the course of the year, over $15 million had been diverted from the fund.
It was an exciting experience to attend the sentencing of Thibeault and to witness the final stages of the SEC’s work. Because cases are investigated for many months, and in some instances years, it is unlikely that I will attend a sentencing for any of the cases that I am currently working on. It is both comforting, yet sad to know that the courtroom scene that I was part of will come to pass for the participants in the cases that I am working on. Thibeault was sentenced to 9 years in prison, a time greatly reduced from the 15 year suggestion by the government.
The case was unusual in its length, and concluded after five hours and thirteen victim testimonies. Such cases are open to the public and are a fascinating way to understand the interplay of legal and financial systems in America.