The Securities and Exchange Commission has charged Dennis Daugs Jr., the owner of Seattle-based investment advisory firm Lakeside Capital Management, with fraudulently misusing client assets to make loans to himself that he used to buy a luxury ski vacation home and refinance a rare vintage car.
According to the SEC order, from 2008 through 2012, Daugs used more than $8 million in client money in breach of his fiduciary duty. Daugs used money from the portfolio of a senior citizen Lakeside client to make loans to himself of $3.1 million without obtaining her consent. He provided no collateral, had no set pay-off dates and paid low interest rates, according to the order. He used this money for his vacation home and to refinance his purchase of a rare 1955 Mercedes Gullwing car. Daugs disclosed the loans to the client in early 2010, shortly after which he paid her the balance he owed on them.
