Yahoo Finance Ex-partner of disgraced financier Rick Siskey settles SEC fraud charges for $350,000
The former business partner of disgraced Charlotte financier Rick Siskey has agreed to pay $350,000 to settle federal fraud charges.
Martin Sumichrast neither admits to nor denies the allegations against him, according to a settlement filed Thursday by the U.S. Securities and Exchange Commission in U.S. District Court in Charlotte.
Siskey, a prominent figure in Charlotte’s business and social scenes, was accused in a federal affidavit of orchestrating a Ponzi scheme that caused estimated losses of about $50 million. He killed himself in December 2016, soon after federal investigators contacted him.
In 2022, the Atlanta office of the SEC accused Sumichrast, a Charlotte entrepreneur, of making numerous unauthorized trades that hurt his investors but benefited himself, The Charlotte Observer reported at the time.
The SEC claimed Sumichrast repeatedly and without approval made investments that damaged the positions of shareholders in Stone Street Partners, his and Siskey’s company. Sumichrast also unilaterally doubled his Stone Street salary, according to the SEC complaint.
The SEC accused Sumichrast of three counts each of fraud and fraud by an investment adviser.
Of the $350,000 he’s agreed to pay, $225,000 represents the net profits he gained from the conduct alleged by the SEC; $50,000 in interest; and a $75,000 civil penalty, according to the settlement.
The settlement “will allow me to finally close a chapter in my life that began with the discovery of the massive Ponzi scheme orchestrated by Rick Siskey,” Sumichrast said in a statement to The Charlotte Observer.
An SEC spokesman declined to comment about the settlement Friday.
Rick Siskey Ponzi scheme
When the SEC accused Sumichrast of fraud in 2022, his lawyer said the businessman was a scapegoat for the agency’s failure to stop Siskey’s Ponzi scheme.
That scheme caused estimated losses of about $50 million, the Observer reported at the time, but the federal investigation led to no criminal charges.
Sumichrast was left as Stone Street’s sole manager until the company dissolved in 2020.
“Ironically,” Sumichrast told the Observer, “the SEC never filed a single complaint against anyone involved in Siskey’s fraud, even though the fraud operated for over a decade and victimized hundreds of investors.”
According to an SEC filing, Sumichrast’s actions happened after Siskey’s death and were unrelated to the Ponzi scheme. Sumichrast changed the name of Siskey Capital to Stone Street after Siskey’s death, according to the SEC. Stone Street and several of its employees later sued the Siskey estate on fraud accusations.
Meanwhile, Sumichrast has co-authored a book about Siskey’s scheme called “Getting Sheared.”
