SEC Charges Ellen Polcari in Alleged $1.28 Million Private Fund Scheme
The SEC alleges Ellen Polcari misappropriated $1.28 million from 85 private fund investors and sold fund shares for $56,000 from 2023 to 2025 in a scheme.
Summary
The SEC charged Ellen Polcari on September 18, 2026, alleging the former employee of two commonly owned venture capital firms misappropriated about $1.28 million invested in private funds they advised. From at least April 2023 through March 2025, certain funds raised approximately $28.67 million from at least 85 investors. Polcari allegedly solicited prospective investors, directed wires to bank accounts she controlled, and diverted portions upon or shortly after receipt. She also allegedly transferred fund-owned stock to herself and sold most of it to a third party for $56,000.
The complaint, SEC v. Ellen Polcari, No. 26-civ-12318, was filed in the U.S. District Court for the District of New Jersey. It alleges violations of Securities Act Sections 17(a)(1) and 17(a)(3), Exchange Act Section 10(b), and Rules 10b-5(a) and 10b-5(c), and seeks permanent and conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties. Benjamin Mishkin and Daphne Downes conducted the investigation under Lindsay Moilanen and Thomas P. Smith Jr. at the SEC’s New York Regional Office. Paul G. Gizzi and Mishkin will litigate under Jack Kaufman’s supervision.
Positives
- The SEC seeks disgorgement with prejudgment interest, civil penalties, permanent injunctions, and a conduct-based injunction.
- The complaint identifies approximately $1.28 million in alleged misappropriation and a separate $56,000 stock sale.
- Bank accounts controlled by Polcari and the alleged stock transfer provide specific transaction paths for the enforcement case.
- Seven named SEC personnel are assigned across investigation, supervision, and litigation roles.
Risks & concerns
- Approximately $1.28 million was allegedly diverted from money invested in private funds between April 2023 and March 2025.
- At least 85 investors supplied approximately $28.67 million to the affected funds during the alleged scheme.
- Prospective investors were allegedly instructed to wire investments directly into bank accounts controlled by Polcari.
- Fund-owned shares were allegedly transferred to Polcari, with most later sold to a third party for $56,000.
- The release names neither venture capital firm nor the affected private funds and reports no investor repayment or recovery.
- The case remains at the complaint stage, so the SEC’s claims are allegations rather than adjudicated findings.
