The Securities and Exchange Commission has recently filed charges against Derek Taller, a former New York investment adviser. The SEC alleges that Taller committed fraud through two companies: Vision BioBanc Holdings LLC and StHealth Capital Investment Corporation.
Our investigation reveals that Taller allegedly provided misleading documents to investors, falsely claiming Vision Holdings had proper board oversight and audited financial statements. According to the SEC, he diverted at least $500,000 from these companies for personal use and directed $21.7 million in loans to a startup where he held an undisclosed stake.
The complaint, filed in the U.S. District Court for the Southern District of New York, cites several violations of federal securities laws, including the Securities Act of 1933 and the Investment Advisers Act of 1940.
The SEC is seeking permanent injunctions against Taller, disgorgement of funds with interest, financial penalties, and a ban from serving as an officer or director.
Key Takeaways
Table of Contents
- Derek Taller allegedly misappropriated over $500,000 from StHealth Capital and Vision BioBanc Holdings for personal use between 2018-2024
- The SEC claims Taller directed $21.7 million in unauthorized loans to a startup where he held an undisclosed personal stake
- Taller provided false offering documents in 2020, misrepresenting independent board supervision and auditor reviews
- The SEC charges include violations of the Securities Act of 1933, Securities Exchange Act of 1934, and Investment Advisers Act of 1940
- The SEC seeks permanent injunctions, disgorgement with interest, civil penalties, and an officer-and-director bar against Taller
SEC Charges Against Derek Taller
The SEC filed charges against Derek Taller last week for conduct that allegedly spanned five years. The complaint details how Taller reportedly raised over $20 million from investors through false statements and undisclosed conflicts of interest.
Allegations of Investment Fraud
The Securities and Exchange Commission has brought serious allegations against Derek Taller, who served as the principal officer and director for StHealth Capital Investment Corporation and Vision BioBanc Holdings LLC from March 2018 through January 2024.
The SEC alleges he provided misleading offering documents to investors in 2020, violating the Securities Act of 1933. Our investigation indicates Taller misappropriated at least $500,000 from both companies for personal expenses.
SEC documents state that Taller directed approximately $21.7 million in loans from Vision Holdings to a startup and its affiliates without proper disclosure. This action violated several securities laws, including Rule 10b-5 of the Exchange Act.
Investors received statements that failed to reveal these unauthorized transactions. Such actions potentially undermine market trust and affect investors who placed their funds with his companies.
Details of Taller’s Alleged Conduct
Misleading Offering Documents
Our investigation identified concerns with the offering documents Derek Taller provided to investors in 2020. The SEC’s complaint alleges Taller made inaccurate claims about Vision BioBanc Holdings LLC.
He reportedly told potential investors that Vision Holdings operated under an independent board’s supervision. Taller also stated that independent auditors would review the company’s financial statements.
The SEC investigation suggests these statements were not accurate. Such representations would violate the Securities Act of 1933, which requires transparent disclosure in investment offerings.
Investors rely on offering documents to make informed decisions about their investments. The SEC considers these potential violations seriously as they can affect the integrity of investment markets.
Misappropriation of Funds
The SEC alleges Derek Taller diverted at least $500,000 from both Vision BioBanc Holdings LLC and StHealth Capital Investment Corporation for personal use. This use of investor funds would represent a violation of the Investment Company Act of 1940.
The SEC’s civil action highlights how Taller acquired an interest in a startup during May 2020, then directed the companies to loan $2 million to this same business. These loans required SEC approval as a joint arrangement, but Taller allegedly failed to obtain this authorization.
The board of directors reportedly never received full disclosure about his personal stake in the startup receiving these loans.
Undisclosed Business Dealings
The SEC alleges that Derek Taller failed to disclose significant business interests to investors. In May 2020, Taller acquired a stake in a startup but did not report this connection to his fund or its investors.
The SEC investigation claims he directed $2 million in loans to this startup without transparency about his personal interest. According to the complaint, between late 2020 and early 2021, he directed approximately $21.7 million in loans from Vision BioBanc Holdings LLC to this entity.
The U.S. Securities and Exchange Commission views these actions as potential violations since investors had no knowledge of Taller’s interests while he made these financial decisions with their investments.
Violations of Securities Laws
The SEC alleges Taller violated several major securities laws through his actions. These alleged violations form the basis for the legal charges that could potentially result in significant penalties and restrictions.
Section 17(a) of the Securities Act of 1933
Derek Taller is charged with violating Section 17(a) of the Securities Act of 1933 in his dealings with StHealth Capital Investment Corporation and Vision BioBanc Holdings LLC.
This law prohibits fraud in the offering or selling of securities. The SEC’s charges against Taller stem from allegations that he used false statements and omitted key facts that misled investors.
The law exists to protect investors from deceptive practices in the securities market.
Section 17(a) addresses three types of misconduct: using devices to defraud, making untrue statements, and engaging in business practices that operate as fraud.
The SEC enforces these rules to maintain market integrity and protect individuals who entrust their investments with financial professionals.
Section 10(b) of the Securities Exchange Act of 1934
While Section 17(a) addresses fraud in securities offerings, Section 10(b) of the Securities Exchange Act of 1934 provides broader fraud protection. The SEC alleges Derek Taller violated this law through deceptive practices in securities transactions.
The SEC charges state Taller engaged in practices that affected investors through his companies StHealth Capital Investment Corporation and Vision BioBanc Holdings LLC. This section works with Rule 10b-5 to prohibit schemes that may deceive others in securities transactions.
The SEC’s complaint against Taller demonstrates how this law protects the market from potential manipulation. Section 10(b) gives the SEC authority to pursue individuals who misrepresent investments or conceal material facts.
Many fraud cases, including those involving various financial instruments, fall under this rule. Taller’s case illustrates the potential consequences of violating these regulations, which exist to maintain market fairness.
Sections 206(1) and 206(2) of the Investment Advisers Act of 1940
Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 provide fundamental fraud protection in the investment advisory industry.
The SEC charged Taller with violating these regulations. Section 206(1) prohibits advisers from using schemes to defraud clients. Section 206(2) makes it unlawful for advisers to engage in practices that disadvantage their clients.
These laws exist to safeguard investments from potential misconduct by advisers like those at StHealth Capital Investment Corporation who might improperly use client funds.
Section 57(a)(4) of the Investment Company Act of 1940
The SEC alleges Derek Taller violated Section 57(a)(4) of the Investment Company Act of 1940, which prohibits business development companies from conducting transactions with their affiliates without SEC approval.
This is relevant to StHealth Capital investors because Taller allegedly engaged in transactions that benefited himself personally. The law exists to protect investments from conflicts of interest.
The SEC charges claim Taller conducted business with Vision BioBanc Holdings LLC without proper disclosure or approval. These actions potentially violated the safeguards established in securities laws.
Similar cases have resulted in significant investor losses. The European Securities and Markets Authority maintains similar rules to protect investors from self-dealing arrangements.
Remedies Sought by the SEC
The SEC is pursuing several remedies against Taller, including court orders, return of funds, and monetary penalties for his alleged actions. The SEC aims to hold Taller accountable for the alleged StHealth Capital fraud scheme and potentially provide recovery options for affected investors.
Permanent Injunctions
The SEC is seeking permanent injunctions as a key remedy in this case involving StHealth Capital Investment Corporation. These court orders would prohibit Taller from future securities law violations.
This legal remedy serves as a deterrent against repeat offenses. Permanent injunctions remain in effect indefinitely, not just for a limited period.
If granted, Taller would face restrictions on his business activities. The SEC aims to protect the investment community from similar situations through this enforcement action.
Disgorgement with Prejudgment Interest
The SEC is requesting that Derek Taller return all funds allegedly improperly obtained from investors. This legal remedy, called disgorgement, requires accused parties to surrender financial gains.
The SEC is also seeking prejudgment interest in addition to the original amount, which accounts for potential profits Taller might have made by using investors’ funds over time.
These financial remedies serve two purposes: they remove any benefits from violating securities laws and create resources that may be returned to affected investors.
The SEC’s objective focuses on potentially providing recovery options for investors through these funds. Disgorgement remains one of the SEC’s primary tools to address financial improprieties in investment fraud cases.
Civil Penalties
The SEC’s case against Derek Taller likely includes requests for financial penalties. Civil penalties serve as a deterrent against future violations in the investment industry.
These monetary fines extend beyond returning funds—they aim to penalize individuals for securities law violations. The SEC pursues these penalties to demonstrate to market participants that fraud carries consequences.
Taller faces these potential fines in addition to possibly returning any improper gains with interest. Such penalties can reach significant amounts depending on the nature of the misconduct and impact on investors.
Officer-and-Director Bar
The SEC’s action against Derek Taller includes a request for an officer-and-director bar. This sanction would prevent Taller from holding leadership positions in public companies.
This penalty protects future investors from potential harm. The bar functions as both a consequence for past conduct and a safeguard for market integrity.
Public companies require trustworthy leaders who adhere to securities laws. If granted by the court, this bar would restrict Taller from corporate boardrooms and executive positions. Financial markets depend on ethical leadership, and the SEC utilizes these bars to maintain investor confidence.
Conclusion
Derek Taller faces serious charges from the SEC for his alleged actions with Vision Holdings and StHealth Capital. The claimed misconduct includes misleading documents, misappropriated funds, and undisclosed business dealings that potentially violated multiple securities laws.
This case illustrates why transparency is essential in all investment relationships. SEC officials are pursuing several remedies against Taller, including financial recovery and leadership restrictions.
Have You Been Affected? Contact Haselkorn & Thibaut Today
If you invested with Derek Taller, Vision BioBanc Holdings LLC, or StHealth Capital Investment Corporation, you may have options for recovery. The investment fraud attorneys at Haselkorn & Thibaut specialize in representing investors who have experienced financial losses due to potential misconduct.
Call (888) 628-5590 today for a free consultation to discuss your situation with our experienced legal team. Our attorneys have recovered millions for investors nationwide and can evaluate your case at no cost to you.
Visit our website at www.InvestmentFraudLawyers.com to learn more about how we can help protect your financial interests.
Haselkorn & Thibaut, P.A. is a nationwide law firm specializing in securities arbitration and investment fraud cases. This article is for informational purposes only and does not constitute legal advice.
