A Charleston attorney who last week was accused of misleading investors on behalf of a client is denying the allegations and emphasizing that he, unlike his client, has not been charged criminally.
John B. Kern declined to comment on the Securities and Exchange Commission administrative action when it was filed on Tuesday, but had his defense lawyers issue a press release late Friday clarifying his position.
“I categorically deny involvement in any fraud upon investors, and I look forward to the opportunity provided by the SEC to present the true facts,” Kern said in the statement.
Kern is also considering litigation against the client, former Oregon state Republican Party chairman and gubernatorial candidate Craig Berkman, and at least one of the companies Berkman controlled.
According to Kern’s statement, Berkman “appears to have misled him and the fund’s investors.”
The local lawyer is also thinking about suing “others who are accusing Kern of knowingly misleading investors,” according to the statement.
The SEC claims Berkman, 71, masqueraded as “a sophisticated fund manager who defrauded investors” seeking shares of Facebook. LinkedIn, Groupon and Zynga before their hotly anticipated initial public offerings. Berkman was arrested on related criminal charges at his home in Florida on Tuesday.
Kern, 49, is not a co-defendant in the criminal case, but he is among Berkman’s co-respondents in administrative proceedings where the SEC alleges he facilitated the investments in Berkman’s companies and then helped conceal the frauds when they began to unravel last year.
Berkman raised more than $13 million from about 120 investors and then misappropriated the money to pay a bankruptcy judgment, other investors and various personal expenses, according to the SEC. The SEC claims Kern, who served as general counsel to the funds, received approximately $293,000 from the investment accounts.
Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_brendan.