A Lone Tree man has agreed to a $1.1 million settlement with the Securities and Exchange Commission for his role in what the commission described as “multiple schemes to defraud investors.”
Tyler Tysdal, whose LinkedIn profile indicates he got an MBA degree from Harvard, has agreed to pay $843,099 in disgorgement and prejudgment interest to former investors, as well as $320,000 in civil penalties, the SEC said this week. He accepted the settlement without admitting to or denying the wrongdoing outlined by the SEC.
The SEC said that between January 2014 and October 2016, Tysdal and business partner Grant Carter, of Johns Creek, Georgia, defrauded investors of Cobalt Sports Capital, an entity the pair formed to make loans to athletes and sports agencies. Instead of using investor funds to make the loans, Tysdal and Carter diverted over $15 million to startups in the portfolio of Impact Opportunities Fund, a private fund Tysdal managed, the SEC said.
Tysdal concealed how the investor money was actually used, and all the startups in the portfolio ultimately failed, according to the SEC.
The SEC also concluded that Tysdal defrauded the Impact Opportunities Fund and its investors by, among other things, charging the fund undisclosed monitoring fees, a portion of which went to Tysdal.
Finally, the SEC found that Tysdal also defrauded private fund TitleCard Capital 1Fund and its investors through two advisers that he controlled. The agency said Tysdal breached the fund’s concentration limits by causing the fund to purchase Cobalt from the Impact Opportunities Fund at the end of 2015, and falsely valuing the fund’s investment in Cobalt in reports to investors.
Tysdal’s business partner Carter has agreed to pay a civil penalty of $160,000, according to the SEC.
Two other individuals also involved in the scheme, Britt Haugland and Michael DeJager, have agreed to pay civil penalties of $15,000 each.
The SEC’s investigation was conducted by Noel Franklin and supervised by Ian S. Karpel of the Denver Regional Office.
Some of Tysdal’s investors sued him in late 2016, resulting in the appointment of a receiver, Randel Lewis, to oversee TitleCard Capital 1Fund and Cobalt. Lewis said in court documents filed last year that Cobalt was “run as a Ponzi scheme.”
Update (9/20): Luke Ritchie, a partner at Moye White who represents the respondents in the SEC investigation, provided the following statement: “As is typical, the terms of settlement confirm that we neither admit nor deny the SEC’s findings. Suffice it to say, having cooperated with the SEC from the very beginning in its time-consuming and costly investigation, my clients are very pleased to put the matter to rest so they can focus on the future.”