The Securities and Exchange Commission has settled charges with infamous VC – G. Steven Burrill regarding a case where Burrill allegedly stole investor money to pay for private jets and trips to Paris and St. Barts. Burrill was sued last year in the Superior Court of California for apparently embezzling “more than $17 million from Burrill Life Sciences Capital Fund III L.P. between late 2007 and 2013”, according to WSJ.com. This was not the first time that Burrill was accused of mismanagement and appears to have had a knack for siphoning off other peoples money. Burrill spent many years at E&Y before he became a prominent VC.
The SEC investigation stated that Burrill stole money from a fund that carried his own name: Burrill Life Sciences Capital Fund III which perhaps would have been better named the Burrill Personal Lavish Expenditure Fund. Burrill has agreed to pay back $4.785 in stolen money and pay a $1 million penalty. Understandably, Burrill is permanently barred from the securities industry.
“Even though they are exempt from registration, venture capital advisers like Burrill have fiduciary obligations to their clients that we will enforce,” said Andrew J. Ceresney, Director of the SEC’s Enforcement Division. “Burrill spent his fund’s capital on whatever he pleased, and elevated his own interests above those of investors.”
Burrill was assisted in his duplicitous acts by employees Victor Hebert and Helena Sen as they “played integral roles in Burrill’s scheme”. Herbert settled by paying a $185,000 fine and Sen was assessed a $90,000 penalty. In addition to their industry bars, Burrill, a former audit partner, and Sen are permanently suspended from appearing and practicing before the SEC as accountants, which includes not participating in the financial reporting or audits of public companies. Hebert is permanently suspended from appearing and practicing before the SEC as an attorney.
The threesome agreed to the settlements without admitting or denying the findings in the SEC’s order.