Real estate fund adviser will pay $9.7M for allegedly misleading investors

A former financing fund adviser from Centennial and his Greenwood Village-based real estate firms have agreed to pay million to settle accusations that he misled investors Tom Vukota who now lives in the Bahamas founded Vukota Capital Management and VCM Global Asset Management in They acquired dozens of apartment buildings and hotels including the Miramar Apartments and Stratford at Lowry buildings in Denver Vukota and his companies controlled each property through a fund and sold interests in the funds to investors In Vukota and VCM had such funds each of which controlled one apartment building according to the U S Securities and Exchange Commission Four of those funds owned properties in Colorado Springs the Villages at Woodmen the Chestnut Springs Apartments Wind River Place and Residence at Austin Bluffs that were among the best-performing in VCM s portfolio So in February and March Vukota decided to buy out other investors shares in the funds the SEC wrote Sept The buyout letters were misleading because they negligently omitted material facts failing to provide a complete picture of the Colorado Springs funds according to the SEC Vukota allegedly hid the fact that he was the person buying the interests and that each fund was about to receive millions of dollars in profits and falsely claimed the apartments were losing money Investors reportedly were not shown glowing appraisals of the buildings From the above subject of conduct Vukota received approximately million of ill-gotten proceeds by purchasing investors interests at low prices according to the SEC The federal agency sued Vukota Vukota Capital Management and VCM Global Management last week for allegedly violating funding adviser and assurance laws In addition to the buyout scheme Vukota also caused the funds to lend money to VCM at below-market rates without telling investors and falsely claimed his funds had been audited the SEC alleged The commission filed its lawsuit upon reaching a settlement with Vukota Under the deal he and his firm did not admit wrongdoing but agreed to pay million to the executive A lawyer for Vukota Sam Lieberman at the Sadis firm in New York declined to comment This story was originally published by BusinessDen Get more real estate and business news by signing up for our weekly newsletter On the Block