Michael Hull, Greenpoint Asset Management II LLC, Christopher J. Nohl, Chrysalis Financial LLC Allegedly Operated an Offering Fraud
Michael G. Hull and his entity, Greenpoint Asset Management II LLC, and Christopher J. Nohl and his entity, Chrysalis Financial LLC, allegedly operated an offering fraud, according to an SEC Complaint under review by investor rights attorney Alan Rosca.
Investor rights attorney Alan Rosca, of the Rosca Scarlato LLC law firm, is investigating activity related to Michael Hull, Greenpoint Asset Management II LLC, Christopher Nohl, and Chrysalis Financial’s LLC alleged operation of an operating fraud. Investors who believe they may have lost money in activity related to Michael Hull, Greenpoint Asset Management II LLC, Christopher Nohl, and Chrysalis Financial’s LLC alleged operation of an operating fraud are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
Hull and Nohl through their entities manage Greenpoint Tactical Income Fund LLC, the Complaint notes. Hull is also the co-owner of Bluepoint Investment Counsel, LLC , a now de-registered investment adviser that claimed to have as much as $145 million in assets under management. Bluepoint through Hull recommended that all of Bluepoint’s individual clients invest in the Greenpoint Tactical Income Fund and other affiliated Greenpoint Funds, the Complaint states.
Hull, Nohl, and their entities are investment advisers to Greenpoint Tactical Income Fund and owe fiduciary duties to the Fund including a duty of loyalty, the Complaint states.
Hull, Nohl, & Their Entities Allegedly Raised Approximately $52.783 Million from Approximately 129 Investors in 10 States
Hull, Nohl, and their entities, from April 25, 2014 to June 2019, allegedly raised approximately $52.783 million from approximately 129 investors in 10 states, according to the aforementioned SEC Complaint.
Hull, Nohl, and their entities, in the offering materials for Greenpoint Tactical Income Fund, allegedly made false and misleading statements to the investors, and Hull, Nohl, and their entities have purportedly represented to investors that Greenpoint Tactical Income Fund is an income fund, the Complaint states.
The Fund’s holdings, however, are allegedly almost entirely non-income-generating and illiquid assets, and, as of June 30, 2018—the last date for which the Fund has financial statements—52% of the Fund’s purported value is its gem and mineral collection and 46% of the Fund’s purported value is an alleged portfolio of debt and equity securities of private companies, primarily consisting of a now defunct and worthless environmental remediation company, the Complaint notes.
Hull, Nohl, & their Entities have Allegedly Misled Investors as to How They Have Been Operating the Fund & Valuing Its Assets
The aforementioned Fund, as of June 30, 2018, allegedly had a net asset value of $135 million based almost entirely on unrealized gains, and 95% of the purported gains are purportedly unrealized, the Complaint reports. Said gains are allegedly largely fictitious, the Complaint reports.
Hull, Nohl, and their entities have allegedly misled investors as to how they have been purportedly operating the Fund and valuing its assets, the SEC notes.
Hull, Nohl, and their entities claim that in 2014 Greenpoint Tactical Income Fund allegedly had a return on investment of 65.68%, and for 2015, they claim that the Fund allegedly had a return on investment of just in excess of 50%, the Complaint reports, and for 2016, they claim that the Fund allegedly had a return on investment of 25.48%.
Hull, Nohl, and their entities, for the first two quarters of 2018, claim that the Fund allegedly had a return on investment of 16.11%, and the purported returns come from Hull and Nohl purportedly improperly inflated the value of Private Company 1 from the valuations of the gems and minerals that, amongst other things, failed to comply with the minimal valuation procedures contained in the Fund’s operating agreements, the Complaint states.
Hull, Nohl, and their entities allegedly initially valued the Fund’s interest in Private Company 1 at over $4.2 million as of December 31, 2015, and purportedly increased the value of the Fund’s interest to over $46 million as of June 30, 2018, the Complaint reports.
Hull, Nohl, and their entities allegedly more than doubled the value from the fourth quarter of 2017 to the first quarter of 2018 while knowing that the primary subsidiary of Private Company 1 was in default on a line of credit secured by all of the subsidiary’s assets and guaranteed by Private Company 1, the Complaint details.
Private Company 1 is now defunct and worthless, the Complaint notes.
Hull, Nohl, and their entities allegedly used their misleading and improperly determined valuations to charge the Fund excessive management and other fees and payments, and, from April 25, 2014 through approximately the first quarter of 2019, they allegedly charged the Fund approximately $13.71 million in fees and payments, the Complaint notes.
Since 2017, Hull, Nohl, and their entities have allegedly charged the Fund more than $5.9 million, and, at the same time, many investors have been told the Fund has no liquidity to meet investor redemption requests, and Hull, Nohl, and their entities allegedly continue to sell interests in the Fund, the proceeds of which are largely used to pay their management fees, repay debt, and to pay some investor redemptions, the Complaint reports.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
Securities Lawyer Investigating
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Michael Hull, Greenpoint Asset Management II LLC, Christopher Nohl, and Chrysalis Financial’s LLC alleged operation of an operating fraud. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, and has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of Michael Hull, Greenpoint Asset Management II LLC, Christopher Nohl, and Chrysalis Financial’s LLC alleged operation of an operating fraud may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.