May 20, 2022 – An AWC was issued in which Blakely Chapman Page (CRD #2922955) was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for six months. Without admitting or denying the findings, Page consented to the sanctions and to the entry of findings that he made negligent misrepresentations about the performance of an investment fund to prospective investors.
The findings stated that Page formed a hedge fund (known as the feeder fund). The feeder fund was formed to pool investor funds and make an investment in another, unaffiliated hedge fund (known as the master fund). Page did not independently verify the accuracy of the performance results provided by the master fund but asked others to conduct due diligence on said fund.
The marketing materials for the feeder fund included the performance numbers for the master fund which were provided by the master fund. However, the performance numbers provided by the master fund significantly overstated its historic rate of return, a material fact. Blakely Chapman Page (CRD #2922955, St. Davids, Pennsylvania) distributed the marketing materials for the feeder fund, which contained the materially inaccurate performance numbers for the master fund, to more than two dozen prospective investors.
Page also exchanged emails with multiple prospective investors in which he affirmed the accuracy of the master fund’s performance results as set forth in the feeder fund’s marketing materials. Page did so even after others at the feeder fund received information that called those performance results into question. Page did not review that information and relied on others to do so.
Seven different investments were made in the feeder fund totaling approximately $1.7 million. When the master fund stopped providing continuing performance information and other customary investment materials to the feeder fund, the feeder fund redeemed its investors’ investments and the investors received full redemptions.
The suspension is in effect from June 6, 2022, through December 5, 2022. (FINRA Case #2019062612901)