SQN Capital Management and Jeremiah Silkowski Settle with SEC, Exit Advisory Business

NEW YORK – SQN Capital Management and its sole remaining partner, Jeremiah Silkowski, have settled with the U.S. Securities and Exchange Commission (SEC) and will exit the investment advisory business. The agreement includes a plan for the orderly wind-down of the firm's remaining equipment leasing funds.

Silkowski voluntarily offered to exit the advisory business as part of the resolution. The SEC complaint resolved by the settlement does not allege misuse of investor funds or personal benefit from the alleged violations.

The SQN funds invested in portfolios of equipment leases and loans. Investors received back between 51% and 65% of their initial capital from the two largest funds. Remaining assets, primarily illiquid interests in assets like marine vessels, led to delays in the complete liquidation of the funds.

The onset of the COVID-19 pandemic delayed liquidations for over five years, during which SQN subsidized operations as cash flow from investments lagged. The firm stated it lacked the resources to sustain both ongoing management and regulatory compliance.

The SEC alleged that SQN overstated investment values by not adjusting fund unit values after the pandemic began. SQN maintained that valuations were based on potential exit opportunities that did not materialize. The firm executed a nearly $20 million distribution to investors in 2020 and later attempted to market the portfolios for sale, but market dynamics hindered these efforts. SQN emphasized that any investor disadvantage from redemptions during the valuation period was funded by SQN's own limited resources, primarily to assist investors facing hardship.

Following the settlement, the fund liquidations will be transferred to a court-appointed receiver. SQN Capital Management will write off all amounts due from and contributed to the funds and will cooperate fully with the receiver in the liquidation process.