A Sheridan businessman has reached a settlement with the Securities and Exchange Commission in a case alleging he bilked investors, engaged in illegal trading practices and misappropriated funds.
As part of the agreement, Lowell Hancher, 57, will be barred from association with any broker, dealer or investment adviser.
Earlier this year, Hancher also agreed to pay $3 million and never run a public company again but didn’t admit wrongdoing. In a court filing Wednesday, the SEC agreed to accept his offer.
The SEC accuses Hancher, as CEO of Westfield-based venture capital firm Commerce Street Venture Group Inc., of raising more than $1.8 million between 2005 and 2007 from at least 60 investors in connection with a fraudulent stock offering.
According to the recent filing, Hancher lied to investors about how their money would be invested and promised them returns of 50 percent, but he instead used the money to pay business and personal expenses.
Hancher also is accused of directing others to place 18 matched orders for more than 60,000 shares of LMWW Holdings Inc., between December 2007 and February 2008. Matching orders is an illegal practice that involves two investors buying and selling a security to each other to artificially bolster its share price.
Between September 2008 and January 2010, the SEC says Hancher convinced an Iowa-based company for which he was a director to give him and others $620,000 under the guise of taking the company private through a stock buyback. According to the SEC, he misappropriated most of the funds, created fake documents and lied to the company’s external auditor to cover up the scheme.
Hancher’s attorney, James Voyles, did not immediately return a call requesting comment.