Money manager gets five years

Steven H. Adler also has to pay $900,000 to his victims, from whom he stole $2-million, the SEC says.

By GRAHAM BRINK, Times Staff Writer
© St. Petersburg Times
published September 25, 2002

TAMPA -- Steven H. Adler, a high-profile money manager convicted of bilking clients, was sentenced Tuesday to five years in prison.

Adler, who ran the ASM Index 30 Fund in the 1990s, will also have to pay $900,000 in restitution to his victims.

Adler, 64, has maintained his innocence from the start.

"I was advised to avoid a trial, and plea bargain, because a jury rarely understands complicated cases involved with finance," he wrote recently in a statement to the Times. "Despite understanding this logic, I couldn't plead guilty to something I didn't do. It goes against my belief of our system."

In May, a federal jury found Adler guilty on 13 counts of mail fraud and seven counts of wire fraud.

The ASM Index 30 Fund attempted to duplicate the performance of the Dow Jones Industrial Average. The fund, Adler said, never generated enough money to cover the cost of managing it and marketing it to investors. Adler said he lost $5-million before giving up two years ago. The Securities and Exchange Commission said Adler stole $2-million from 11 investors to pay his expenses and those of his management company, Vector Index Advisors.

The investors, who received fictitious account statements, said they thought Adler was switching their money between the ASM Fund and a money market account to take advantage of market fluctuations.

When the investors sued him two years ago, Adler said, they knew their money was being invested in Vector, not in the ASM Fund.

The SEC barred Adler from the securities industry last year. He consented to the SEC action without admitting or denying the findings. The SEC also directed him to pay $2-million, but waived the requirement based on his inability to pay.

About the same time, a federal grand jury indicted him on the wire and mail fraud charges. The evidence showed that Adler never invested some of the money but instead kept it for his own use, according to federal prosecutors.

Adler said he plans to appeal. He is not required to report to prison until November.

-- Graham Brink can be reached at (813) 226-3365 or brink@sptimes.com.

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