The U.S. Securities and Exchange Commission (SEC) has levied charges against New York-based Concord Management LLC and its founder, Michael Matlin, for functioning as unregistered investment advisers. Their sole client was the Russian oligarch Roman Abramovich, the New York Times reported. Authorities froze over $13 billion; some of those assets were believed to be investments Concord had made for Abramovich.
Former Russian Governer Abramovich
Between 2000 and 2008, Abramovich served as the governor of Russia’s eastern Chukotka region and is perceived to have close ties with Russian President Vladimir Putin. In the West, he is primarily recognized for owning the English football club Chelsea FC from 2003 to 2022. However, following Russia’s incursion into Ukraine, the UK government seized his assets, prompting him to divest his stake in the club.
The New York Times reported in March 2022 that Concord had managed dozens of investments for Abramovich. In February, Russia invaded Ukraine, and international authorities began to issue sanctions against Russian oligarchs close to President Putin. The U.S. never imposed sanctions on Abramovich, but the UK and EU did. In August 2022, the SEC had opened an investigation into Concord.
Chelsea FC was sold for nearly $5 billion in May 2022 to a group led by American billionaire Todd Boehly; Abramovich allegedly didn’t get proceeds from the sale. Despite the Western sanctions, Forbes estimates his net worth to be at $9 billion in Sept 2023, down from $14.5 billion in 2021.
The SEC Allegations Against Concord
The SEC’s complaint states that since its inception in 1999, Concord, under Michael Matlin‘s guidance, managed and advised on investments in U.S. private funds for this client. From 2012 to March 2022, they oversaw investments in private equity and hedge funds worth billions. Despite their activities mandating registration with the SEC, neither party complied, thereby evading certain legal and reporting obligations.
By January 2022, they managed approximately $7.2 billion across 112 private funds for Abramovich. In March 2022, following sanctions imposed by the UK and EU, the client’s assets were frozen. The SEC alleges that Concord and Matlin had previously aided the client in liquidating investments.
“While we are disappointed with the SEC’s decision to pursue this non-intent-based claim, we are confident that a full and fair review of the applicable law and relevant facts will underscore that Concord Management and Michael Matlin complied with all regulatory and legal requirements,” a spokesperson for Concord and Micheal Matlin said.
