SEC lawsuit targets SQN Capital and CEO Jeremiah Silkowski over alleged fraud

The Securities and Exchange Commission (SEC) has filed a lawsuit against SQN Capital Management LLC and its President, CEO and CCO, Jeremiah Silkowski, alleging a long-running series of violations of the Investment Advisers Act of 1940. The complaint was filed in the New York Southern District Court on September 18, 2026.

According to the SEC, from at least 2019 through 2025, Silkowski and SQN Capital breached their fiduciary duties to four investment funds they managed: SQN Alternative Investment Fund III L.P., Alternative Investment Fund IV L.P., SQN Portfolio Acquisition Company LLC, and SQN Special Opportunity Fund, LLC. The regulator alleges that the defendants failed to comply with governing fund documents and overstated the funds' net asset values.

The SEC claims that Silkowski and SQN Capital failed for years to engage an accounting firm to audit the funds' annual financial statements or to prepare unaudited statements conforming to Generally Accepted Accounting Principles (GAAP), as required by the funds' governing documents. Additionally, the only asset valuations prepared during the relevant period were prepared by Silkowski alone, not by a third-party valuation consultant as he represented to investors, and Silkowski materially overstated those values, according to the complaint.

The SEC further alleges that Silkowski kept net asset values unchanged for years, regardless of changes in projected cash flows, deteriorating market conditions, actual asset performance, or whether an asset was still held. He also repeatedly misled investors about the status of SQN Capital's efforts to liquidate fund assets, claiming without reasonable basis that the liquidation process would soon be completed, while not disclosing that market conditions prevented sales at the inflated values and that SQN Capital lacked resources to complete the process. The liquidation has extended well past prescribed periods, leaving investors without access to their funds, the SEC said.

According to the complaint, Silkowski made baseless statements that SQN Capital was on the verge of completing asset sales that would facilitate liquidation and result in imminent distributions, despite knowing that efforts to sell fund portfolios had never resulted in any sales contracts, letters of intent, or term sheets. He also disseminated inflated net asset valuations to investors, concealing the decline in their investments, the SEC alleged.

The SEC noted that SQN Capital and Silkowski are recidivists, having been charged twice before in settled administrative proceedings with violating the Advisers Act custody rule and compliance rule, first in 2020 and again in 2023. Both actions arose from SQN Capital's failure to deliver audited financial statements to fund investors, and Silkowski was charged in the second proceeding with aiding and abetting and causing those violations. Despite cease-and-desist orders and monetary penalties, the SEC claims SQN Capital continued to violate the rules, aided and abetted by Silkowski.

The SEC accuses SQN Capital of violating Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rules 206(4)-2 and 206(4)-7 thereunder. Silkowski is accused of violating Sections 206(1) and 206(2) and aiding and abetting SQN Capital's violations of Section 206(4) and Rules 206(4)-2 and 206(4)-7.

The Commission seeks a final judgment permanently enjoining the defendants from violating the federal securities laws and rules alleged in the complaint; ordering Silkowski to pay civil money penalties; appointing a receiver to liquidate the assets of the funds and distribute proceeds to investors; permanently prohibiting Silkowski from acting as or associating with an investment adviser, broker or dealer, except as necessary to assist the receiver with the orderly liquidation; and ordering any other relief the Court deems just and proper.