What did they get wrong with their motion seeking disgorgement? It would seem pretty much everything.
The Motion claims that fees and expenses were taken outside of the parameters of the fund agreements, but actually reading the contract language tells a different story. The funds’ governing documents allow for indirect investments, charging for indemnity, and incurring other expenditures. And more importantly, “The river branded businesses served the interests of the funds and their expenditures did not constitute personal profit to Mr. Rothenberg.”
Mistakes made by Silicon Valley Bank have lead to faulty conclusions and are the subject of a separate suit. Transfers made without direction or consent of Mike Rothenberg set off a chain reaction that has is still unfolding.
For more detail on just how much the SEC got wrong with this motion, see below: