A federal court has permanently barred New York investment adviser Jeremiah Silkowski from the securities industry and ordered him to pay a $200,000 civil penalty after regulators accused him of inflating the value of four private funds for years. Judge Jed S. Rakoff entered consent judgments against Silkowski and his firm, SQN Capital Management LLC, on October 8, 2026, and appointed a receiver to unwind the funds.
What happened in the SEC case against Jeremiah Silkowski
The Securities and Exchange Commission sued Silkowski and SQN Capital Management on September 18, 2026, in the Southern District of New York. The complaint alleged violations of the antifraud provisions of the Investment Advisers Act of 1940.
SQN Capital, registered as an investment adviser since 2012, managed four private funds that pooled investor capital into industrial equipment leases and asset-backed financing. As recently as April 2025, the firm claimed $75.4 million in discretionary assets.
Key facts in the SQN Capital Management case
| Item | Detail |
|---|---|
| Defendants | Jeremiah Silkowski, 51, of Dobbs Ferry, New York; SQN Capital Management LLC |
| Court and case | S.D.N.Y., No. 1:26-civ-08162 |
| Complaint filed | September 18, 2026 |
| Judgments entered | October 8, 2026, by consent, Judge Jed S. Rakoff |
| Funds at issue | SQN Alternative Investment Fund III and IV, SQN Portfolio Acquisition Company, SQN Special Opportunity Fund |
| Assets claimed | $75.4 million as of April 2025 |
| Civil penalty | $200,000, payable within 180 days |
| Industry status | Permanent bar from acting as an adviser, broker, or dealer |
How SQN Capital inflated fund values, according to the SEC
From at least 2019 through 2025, the SEC alleged, Silkowski never engaged an accountant to audit the funds or prepare statements that met generally accepted accounting principles. The funds’ governing documents required both.
The only valuations prepared during that period came from Silkowski alone. He told investors an independent valuation consultant had done the work, regulators said.
He kept net asset values unchanged for years, regardless of deteriorating market conditions, actual asset performance, or whether the funds still held the assets. By the end, the only steady income was $33,000 per month from one investment, all of it consumed by operating expenses and management fees.
Silkowski also repeatedly told investors that a liquidation was nearly complete. The funds had sat well past the exit periods their own documents prescribed, leaving investors without access to their money.
Prior SEC actions against SQN Capital Management
The 2026 case was the third time the SEC had acted against the firm, a record the agency described as recidivist conduct.
| Year | Action | Penalty |
|---|---|---|
| 2020 | Custody rule failures; audited statements not delivered to private fund investors for years | $75,000 against the firm |
| 2023 | Repeated custody and compliance failures; Silkowski charged with aiding and abetting | $200,000 firm; $100,000 individual |
| 2026 | Inflated valuations and false liquidation claims | $200,000 penalty, industry bar, receiver appointed |
What the court-appointed receiver means for SQN investors
The receiver will liquidate the assets of the four funds and distribute net proceeds to investors. Receivership claims typically take years, and recoveries depend on what the assets actually fetch.
SQN and Silkowski settled without admitting or denying the allegations. In an October 12 statement, the firm said the complaint contained no allegation of misuse of investor funds or personal benefit. It noted that nearly $20 million went to investors in 2020 and that investors in its two largest funds had received back between 51 and 65 percent of their initial capital.
Red flags investors should recognize
Private fund investors can screen for trouble before it becomes a receivership. Several warning signs appeared in this case.
- Missing audits. Fund documents required audited statements, yet none were produced for six years.
- Self-prepared valuations. One person valued illiquid assets while claiming an outside expert did the work.
- Static numbers. Net asset values that never move through a pandemic and a rate shock are not a sign of stability.
- Perpetual liquidation promises. Repeated claims that a sale was imminent, year after year, with no distributions.
What affected investors can do now
Investors in the SQN funds should watch for receiver notices, file claims when the process opens, and keep their fund documents and statements together. Tax treatment of any recovery may need professional review, since receivership distributions can span several years.
Investors elsewhere who suspect an adviser has overstated values or withheld statements can request audited financials directly and escalate to regulators when none arrive.
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