To Beat The SEC, Run Out The Clock

Money manager Charles Kokesh was supposed to pay back tens of millions of dollars in unlawful gains. But it turns out the watchdog caught him too late.

- Matt Robinson

Over the course of 12 years, Charles Kokesh quietly misappropriated more than $30 million from investors, a jury found in 2014. Kokesh, now 71, cultivated some expensive and unusual hobbies, such as importing Argentine polo ponies and participating in cowboy-style shooting competitions, according to trial testimony. But the really unusual part of the story is how the U.S. Supreme Court decided he wouldn’t have to pay back most of the cash.

Kokesh started four funds in the 1980s and ’90s. The pitch: They’d finance promising technology companies. Thousands of people ended up investing more than $100 million in them. Geoff Shepard was one. He put $5,000 into a fund in 1986, hoping he’d get in early on the next big thing. “You would have thought we could hit several home runs betting on technology back then,” says Shepard, a former corporate lawyer for Cigna Corp.

Instead, Kokesh’s funds suffered massive losses, especially after the dot-com bust. But according to the Securities and Exchange Commission, he still managed to maintain a lavish lifestyle. He bought a horse park in Santa Fe, N.M., to house more than 50 horses and play polo, and a motor home to travel to those shooting competitions, a former executive at his firm testified. He converted part of an unused office building into his own private bootmaking shop and even hired a bootmaker to run it. Kokesh declined to comment for this story.