Managers of Tax Free Fund for Utah (Tffu) Charged With Fraud
Kimball L. Young of Salt Lake City, Utah and Thomas S. Albright of Louisville, Kentucky worked for Aquila Investment Management, LLC and were co-portfolio managers for the Tax Free Fund for Utah (TFFU). They were charged with deceptive conduct and breaches of fiduciary duty by improperly charging the bond issuers over a half million dollars in "credit monitoring fees", according to an SEC Press Release. The exact amount of the monitoring fees between 2003 and 2009 was $520,626, which was not authorized by Aquila or the TFFU Board of Trustees. In 2008 alone, they received a total of $256,071 in fees. Both Albright, who focused on buying and selling publicly traded bonds in secondary markets, and Young, who focused on the acquisition of non-rated securities including private placements, were suspended in April 2009.
To settle the allegations, Young agreed to pay $294,789 in disgorgement and prejudgment interest and a $75,000 penalty, in addition to being barred from the securities business for five years. Albright agreed to pay $294,789 in disgorgement and prejudgment interest and a $50,000 penalty, in addition to being barred from the industry for one year.