Joseph Stilwell and Stilwell Value LLC were charged with using $20 million in investor funds to make short-term loans to purchase securities over a period of 7 years.
J. Stilwell is a 53 year old resident of New York, NY and the principal owner of Stilwell Value, LLC. Stilwell owns ~99% of Stilwell Value.
Quick Summary: All loans were repaid, but the Commission believes the loans represented a conflict of interest which compromised the fiduciary responsibility of the advisers. At the very least, investors should have been informed about the loans which were undocumented.
The Penalty: Both J. Stilwell and Stilwell Value were issued a cease and desist order by the SEC and suspended from association with any broker, dealer, or investment adviser. Stilwell is also prohibited from acting as an employee, officer, director, investment adviser or principal underwriter for 12 months and is ordered to pay disgorgement/penalties of over $500,000.
To read the original order click here.