SEC v. Nicholas Lattanzio; Black Diamond Investments, LP; Black Diamond GP, LLC; Black Diamond Investments LLC; and Black Diamond Capital Appreciation Fund, L.P., District of New Jersey (June 10, 2015) — Complaint

Andrew M. Calamari 
Sanjay Wadhwa 
George N. Stepaniuk 
Todd Brody 
David C. Austin 
Attorneys for Plaintiff 
U.S. SECURITIES AND EXCHANGE COMMISSION  
New York Regional Office 
200 Vesey Street, Suite 400 
New York, NY 10281-1022 
(212) 336-0080 (Brody) 
 
UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 
________________________________________________ 
        : 
SECURITIES AND EXCHANGE COMMISSION, : 
        : Civil No. 
     Plaintiff,  : 
        :  
  -against-     : Jury Trial Demanded 
        : 
NICHOLAS LATTANZIO,      : 
BLACK DIAMOND INVESTMENTS, LP,  : 
BLACK DIAMOND GP, LLC,    : 
BLACK DIAMOND INVESTMENTS LLC, AND : 
BLACK DIAMOND CAPITAL APPRECIATION : 
FUND, L.P.,         : 
        : 
     Defendants.     : 
________________________________________________: 
 
COMPLAINT 
 
Plaintiff Securities and Exchange Commission (“Commission”) alleges the following 
against defendants Nicholas Lattanzio (“Lattanzio”), Black Diamond Investments, LP (“Black 
Diamond Investments”), Black Diamond GP, LLC (“Black Diamond GP”), Black Diamond 
Investments LLC (“Black Diamond LLC”) and Black Diamond Capital Appreciation Fund, L.P. 
(“Black Diamond Fund” or “the Fund”) (collectively, “Defendants”): 

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SUMMARY OF ALLEGATIONS 
1. This case involves an offering fraud perpetrated by Lattanzio, a purported hedge 
fund manager, who misappropriated approximately $5 million from private investors for his own 
personal use.  From in or around August 2011 to August 2014, Lattanzio offered and sold interests 
in the Black Diamond Fund, promising investors that their money would be used to make various 
lucrative investments.  Instead, Lattanzio simply stole most of the money he raised. 
2. According to the Fund’s private placement memorandum and other documents 
given to investors, the Fund’s “investment objective” was to “maximize income and capital 
appreciation by investing in a variety of highly liquid fixed income” securities using “proprietary 
investment strategies.”  While Lattanzio temporarily invested a limited amount of the investor 
money deposited into the Fund, he quickly depleted the Fund’s assets in order to finance a lavish 
lifestyle for himself and his family.  Among other things, he used Fund assets to purchase a $1 
million-plus home in Montclair, New Jersey, to repay over $760,000 in credit card debt, to buy a 
$124,000 luxury car and merchandise from Tiffany & Co. worth over $100,000, and to pay for 
his children’s tuition at an elite private school and his membership at an exclusive golf club.  He 
also withdrew over approximately $570,000 in cash or checks written to himself and his 
girlfriend (“Girlfriend A”), and paid over $30,000 to a yacht broker. 
3. Among the investors were two small companies that were looking for capital to 
finance their business activities.  Lattanzio, acting directly and through one or more representatives, 
told executives of the two small companies that they would be able to secure capital through a 
lending facility on the condition that the companies first invest with Black Diamond Fund a 
percentage of the capital they were seeking.  Lattanzio and his representatives also guaranteed that 

 3 
the companies could withdraw their money from the Fund in the event that the lending facility was 
not consummated within a specified period of time. 
4. As a result, each of the two companies invested approximately $2 million in the 
Black Diamond Fund, but neither company ever obtained financing and, despite repeated requests, 
Lattanzio never returned any of their money.  
5. By virtue of the conduct alleged herein, the Defendants, directly or indirectly, 
singly or in concert, violated and are otherwise liable for violations of the federal securities laws, 
as follows:  
(a) Each of the Defendants violated Section 17(a) of the Securities Act of 1933 
(“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 
(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];  
(b) Lattanzio, Black Diamond Investments, Black Diamond GP, and Black Diamond LLC 
violated Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (“Advisers 
Act”) [15 U.S.C. §§ 80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. § 
275.206(4)-8];  
(c) Lattanzio is also liable as a controlling person pursuant to Section 20(a) of the 
Exchange Act [15 U.S.C. § 78t(a)] for the violations committed by Black Diamond Fund, Black 
Diamond Investments, Black Diamond GP, and Black Diamond LLC of Section 17(a) of the 
Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 
(d) Lattanzio is further liable pursuant to Section 15(b) of the Securities Act [15 U.S.C. § 
77o(b)] and Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)] for aiding and abetting the 
violations committed by Black Diamond Fund, Black Diamond Investments, Black Diamond GP, 

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and Black Diamond LLC of Section 17(a) if the Securities Act [15 U.S.C. § 77q(a)], Section 
10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-
5]; and  
(e) In addition, Lattanzio is liable pursuant to Section 209 of the Advisers Act for aiding 
and abetting the violations committed by Black Diamond Investments, Black Diamond GP and 
Black Diamond LLC of Sections 206(1), 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 
80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 275.206(4)-8]. 
6. Unless the Defendants are permanently restrained and enjoined, they will again 
engage in the acts, practices, transactions and courses of business set forth in this complaint and 
in acts, practices, transactions and courses of business of similar type and object. 
JURISDICTION AND VENUE 
7. The Commission brings this action pursuant to authority conferred by Section 
20(b) of the Securities Act [15 U.S.C. § 77t(b)], Section 21(d)(1) of the Exchange Act [15 U.S.C. 
§ 78u(d)(1)], and Section 209(d) of the Advisers Act [15 U.S.C. §§ 80b-9(d)], and seeks to 
restrain and permanently enjoin the Defendants from engaging in the acts, practices, transactions 
and courses of business alleged herein.  In addition, the Commission seeks a final judgment 
ordering the Defendants to (i) disgorge their ill-gotten gains, together with prejudgment interest 
thereon, including an order holding each of the Defendants jointly and severally liable for the ill-
gotten gains of each of the other Defendants; (ii) pay civil monetary penalties pursuant to Section 
20(d) of the Securities Act [15 U.S.C. § 77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C. 
§ 78u(d)(3)], and Sections 209(e) and 209(f) of the Advisers Act [15 U.S.C. §§ 80b-9(e) and (f)]; 
and (iii) provide an accounting. 

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8. This Court has jurisdiction over this action pursuant to 28 U.S.C. §1331, Sections 
20(b), 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d),77v(a)]; Sections 21(d), 
21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa], and Sections 209 and 
214 of the Advisers Act [15 U.S.C. §§ 80b-9, 80b-14].   
9. Venue is proper in this District pursuant to 28 U.S.C. §1391(b)(2), Section 22(a) 
of the Securities Act [15 U.S.C. §77v(a)], Section 27 of the Exchange Act [15 U.S.C. §78aa], 
and Section 214 of the Advisers Act [15 U.S.C. § 80b-14].  Many of the acts, practices, events, 
transactions, communications, courses of business and other matters alleged herein occurred in 
the District of New Jersey, including misrepresentations made to investors and misappropriation 
of investor funds.  Moreover, (i) Lattanzio resides in the District of New Jersey and/or resided 
there during the relevant period; and (ii) Black Diamond Fund, Black Diamond Investments, 
Black Diamond GP and Black Diamond LLC have their principal place of business in the 
District of New Jersey. 
10. In connection with the conduct alleged in this complaint, the Defendants, directly 
or indirectly, singly or in concert, have made use of the means or instruments of transportation or 
communication in, and the means or instrumentalities of, interstate commerce, or of the mails. 
THE DEFENDANTS 
11. Lattanzio, age 58, resides in Montclair, New Jersey and, during parts of the 
relevant period, also resided in West Orange, New Jersey.  Lattanzio is the 100% owner of Black 
Diamond Investments LLC, through which he controls Black Diamond Fund, Black Diamond 
Investments, LP and Black Diamond GP, LLC.  He also owns 90% of Black Diamond 
Investments, and the other 10% is owned by the Lattanzio Family Trust, of which he is Trustee.   

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12. Black Diamond Fund is a Delaware limited partnership with its principal place 
of business in Montclair, New Jersey.  Black Diamond Fund serves as a purported investment 
vehicle for its limited partners.  Black Diamond Fund is advised and managed by Black Diamond 
Investments and the Fund’s general partner, Black Diamond GP.   
13. Black Diamond Investments is a New Jersey limited partnership with its 
principal place of business in Montclair, New Jersey.  Black Diamond Investments is an 
unregistered investment advisor for Black Diamond Fund.  The general partner of Black 
Diamond Investments is Black Diamond LLC.   
14. Black Diamond GP is a New Jersey limited liability company with its principal 
place of business in Montclair, New Jersey.  Black Diamond GP is the general partner of Black 
Diamond Fund and manages that entity.  The sole member of Black Diamond GP is Black 
Diamond LLC.   
15. Black Diamond LLC is a New Jersey limited liability company with its principal 
place of business in Montclair, New Jersey.  Black Diamond LLC is 100% owned by Lattanzio.  
Black Diamond LLC is the general partner of Black Diamond Investments and is the sole 
member of Black Diamond GP.   
RELEVANT INDIVIDUALS AND ENTITIES 
16. Company A is , upon information and belief, a Delaware corporation that has a 
principal place of business in New York, New York and is engaged in the oil and gas business. 
17. Company B is, upon information and belief, a Georgia limited liability 
corporation that has a principal place of business in Atlanta, Georgia and, through an affiliate, is 
engaged in the business of managing and developing hotels.     

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18. Associate A is an individual who is associated with a purported lending company 
that shares a mailing address with Associate A in Southport, CT.  Through that company, 
Associate A acted as Lattanzio’s agent and, on Lattanzio’s behalf, solicited Company A and 
Company B, along with others, to participate in the Black Diamond Fund offering at issue here.   
THE DEFENDANTS’ FRAUDULENT SCHEME 
19. Through oral and written misrepresentations made by Lattanzio and by Associate A, 
acting on Lattanzio’s behalf, Lattanzio induced investors, including Company A and Company B, to 
transfer approximately $5 million to Black Diamond Fund for a purported investment in the Fund.  
Lattanzio and Associate A told investors, including Company A and Company B, that Black 
Diamond Fund would invest the funds in securities and, in at least some instances, that the 
investment would remain secure and liquid and subject to a guaranteed right of redemption.  
Lattanzio then stole virtually all the money invested in the Fund. 
20. According to Black Diamond Fund documents, Black Diamond Investments and 
Black Diamond GP advised and managed the Fund, while Black Diamond LLC was the general 
partner of Black Diamond Investments and sole member of Black Diamond GP.   In addition, an 
investment management agreement that Lattanzio entered into with at least one investor also 
identified Black Diamond LLC as an investment manager.  All three entities were owned and/or 
controlled by Lattanzio and operated as alter egos through which he purported to engage in the 
business of providing investment advice regarding securities for compensation.  According to 
Fund documents, Lattanzio was responsible, as an “investment advisor” and “principal decision 
maker,” for the selection of investments and the management of the Fund, and he held himself 
out to investors as an investment adviser.  In fact, Lattanzio’s posture as an investment adviser 
was simply a ruse to defraud the Fund’s investors. 

 8 
The Misrepresentations to Company A 
 
21. Upon information and belief, Company A is an entity that acquires distressed oil 
and gas assets and manages those assets.  In October 2013, while seeking external sources of 
funding, Company A was introduced to Associate A, who was acting as a representative of 
Lattanzio and Black Diamond Fund.  Associate A told officers of Company A that he was 
capable of arranging project financing for Company A in the form of a $20 million credit facility 
from a third party.  Associate A also told Company A that, as a condition for securing the credit 
facility, Company A would first be required to invest $2 million with Black Diamond Fund.  
22. In the course of those discussions, Associate A made, on Lattanzio’s behalf, a 
number of representations to Company A about Black Diamond Fund that were materially false 
and misleading.  Associate A provided Company A with a document titled “Project Financing 
Through Black Diamond and/or a Black Diamond ‘Funding Partner.’”  According to this 
document, the financing sought by Company A was to be provided either directly by Black 
Diamond Fund or through a “funding partner.”  In either scenario, Company A was required to 
make a “Capital Deposit” in the Fund, and the financing for Company A would take one of two 
forms.  If the financing was provided by a third party, it would be in the form of a loan to 
Company A by the third party.  If Black Diamond Fund was the source of the financing for 
Company A, it would be in the form of a “return on investment” made by Company A with the 
Fund.  The document further provided that if the financing was not made available to Company 
A within 120 days, Company A’s deposit could be withdrawn from the Fund immediately.   
23. In an October 22, 2013 email, Associate A further represented, on Lattanzio’s 
behalf, that Associate A would be “paid by Black Diamond and the funding entity on the back 
side,” and that “Black Diamond is relied upon to manage the funds on deposit in Black Diamond 

 9 
[so as] to pay any underwriting expenses necessary to close the loan without invading the 
principal deposit.”  In this email, Associate A reiterated that Black Diamond Fund would return 
the invested funds to Company A either upon a failure to finalize the credit facility within 120 
days or upon “90% funding” of the credit facility.  Associate A further told Company A that the 
funds would only be invested by Black Diamond Fund after the credit facility had been finalized, 
and would be maintained by Black Diamond Fund in a segregated account until that time. 
24. On or about December 2, 2013, Associate A also provided to Company A, on 
Lattanzio’s behalf, a document titled “Broad Terms Of A Proposal To Provide Funding To 
[Company A] For The Development Of Its Existing Oil Fields And Its Expansion Program” 
(“Company A Term Sheet”).  This document memorialized the terms described above, including 
the requirement that Company A “make a deposit of at least Two Million US Dollars 
($2,000,000) to a Capital Contribution Account through Black Diamond . . . in exchange for 
shares in the Black Diamond Capital Appreciation Fund LLP via a Private Placement 
Memorandum before underwriting or engagement of the lending process starts.”  The Company 
A Term Sheet reiterated that Company A could withdraw the full amount of its deposit from the 
Black Diamond Fund if the financing for Company A was not finalized within 120 days.  On or 
about December 5, 2013, Lattanzio and Company A’s CEO signed a Letter of Understanding 
(“Company A LOU”) setting out the terms described above and attaching a Black Diamond Fund 
Confidential Private Placement Memorandum (“September 2013 PPM”) dated September 2013.  
In the Company A LOU, the PPM and the other documents described herein, the Defendants 
made a number of representations that, as described more fully below, were materially false and 
misleading because, at the time, Lattanzio intended to and did steal virtually all the money 
placed into the Fund rather than invest it. 

 10 
25. According to the PPM, the Fund’s “investment objective” was to “maximize 
income and capital appreciation by investing in a variety of highly liquid fixed income” securities 
using “proprietary investment strategies,” including investing in (i) “investment grade fixed 
income financial instruments as a riskless principal, either as an intermediary between issuer and 
end-buyer, or through participating in the fixed income underwriting process as part of an 
underwriting syndicate;” and (ii) “callable and non-callable Triple-A rated debt obligations of the 
U.S. Treasury and the U.S. Agencies.”  The PPM also identified Lattanzio as managing member 
and “principal decision maker” for the Fund’s adviser and general partner, Black Diamond 
Investments and Black Diamond GP, respectively.  The Company A LOU purported to modify 
the PPM in two important respects, by providing Company A with a 120-day withdrawal 
guarantee for the $2 million that Company A was to invest in the Fund and by requiring the Fund 
to pay Company A 5% of the “performance” of Company A’s $2 million investment on an 
annual basis. 
26. On December 6, 2013, Associate A again represented to Company A in an email 
that Black Diamond Fund would “hold[] and manage[] your funds,” and that “your funds are 
secure and available to be returned at the end of 120 days in the unlikely event that you do not 
receive you [sic] funding” from the designated third party.  Associate A attached to this email an 
information sheet (“Information Sheet”) bearing a Black Diamond Fund heading and stating, like 
the PPM did, that the Fund’s “investment objective is to maximize income and capital 
appreciation by investing in a variety of highly-liquid fixed income instruments.”   The 
Information Sheet also stated that the Fund’s investment strategy had generated “historical pro 
forma returns” of 18.14% and over $900,000 in “cumulative portfolio earnings” per million 
dollars under management from January 2008 through March 2013. 

 11 
27. On December 9, 2013, Company A’s CEO signed the Company A Term Sheet 
and executed a Limited Partnership Agreement and Subscription Agreement, through which 
Company A purchased a limited partnership interest in Black Diamond Fund for $2 million.  
Representatives of Company A then met in person with both Lattanzio and Associate A at 
Company A's New York City offices on December 11, 2013.  At that meeting, Lattanzio and 
Associate A made further representations about the investment quality, asset size and prior 
performance of the Black Diamond Fund.  Specifically, Lattanzio and Associate A represented 
that the Black Diamond Fund was a well-established fund with a significant history, multiple 
investors, assets under management of approximately $100 million and an annual average return 
of 18 percent since 2008.   
28. On December 20, 2013, Company A’s largest investor transferred $2 million on 
Company A’s behalf to the Black Diamond Fund’s administrator, which in turn wired 
$1,979,600 to the Fund’s brokerage account on December 24, 2013. 
29. As Lattanzio knew or recklessly disregarded, the representations described in 
paragraphs 21-27 were materially false and misleading.  The fundamental premise that Lattanzio 
presented to Company A was completely false, as there was no credit facility forthcoming and 
Lattanzio had no intention of returning the funds to Company A.  Lattanzio did not maintain 
Company A’s funds in a segregated account, but rather began dissipating those funds while 
discussions about the purported credit facility were still ongoing.  The descriptions of the Fund’s 
investment strategy and track record of sizable returns were also materially false and misleading, 
as Black Diamond Fund had no meaningful investment track record of any kind, let alone a track 
record utilizing the strategy described in the PPM and other documents provided to Company A .  
Moreover, on April 14, 2014, Black Diamond Fund filed a petition to confirm an arbitration 

 12 
award in which the Fund stated that the only partners in the Fund were Lattanzio and Company 
A.  Similarly, on August 4, 2014, Black Diamond Fund filed a Form D with the Commission 
stating that the Fund had only sold $2 million in limited partnership interests – the amount sold 
to Company A.  The reference to "historical pro forma" returns in the Information Sheet was also 
false to the extent it purported to convey a proven track record of success, which the Fund 
lacked, and was, in any event, materially false and misleading because Lattanzio had no 
investment strategy and no track record at all – just a plan to steal money from Company A. 
30. After transferring the $2 million to the Black Diamond Fund’s administrator, 
Company A repeatedly sought information from Lattanzio about the status of the credit facility 
and, when it became apparent to Company A that the financing from a third-party was not 
coming to fruition, sought to redeem its investment.  In response, Lattanzio sought to dissuade 
Company A from persisting with its withdrawal request by falsely claiming that the financing 
was imminent or had been received and making other misrepresentations.  Among other things, 
Lattanzio falsely claimed, including in emails, that (i) he believed that Company A had received 
the promised credit facility; (ii) there had been investment activity in Company A’s account at 
the Fund and that he would provide information about the purported investment activity to 
Company A; (iii) he could not process the redemption request because of incorrect wire 
instructions or other technical problems; and (iv) a redemption would cause a loss to other 
investors in the Fund. 
31. As described below in paragraphs 39-43, Lattanzio knew or recklessly 
disregarded that these later representations were, like the earlier representations, materially false 
and misleading, because he had already used, and was continuing to use, substantial amounts of 

 13 
money in the Fund to pay various personal expenses and had otherwise misappropriated, and was 
continuing to misappropriate, Fund assets. 
The Misrepresentations to Company B 
32. Lattanzio defrauded Company B out of almost $2 million in similar fashion.  
Company B is involved in managing and developing hotels.  In June 2014, while seeking 
funding to finance development of a hotel in Georgia, Company B was introduced to Associate 
A.  As with Company A, Associate A acted as Lattanzio’s agent and, in fact, told Company B 
that he was an employee of Black Diamond.  Between July 23 and July 30, 2014, Associate A 
emailed Company B a number of documents setting out the terms of Black Diamond’s proposed 
financing arrangement, including (i) a broad term sheet ( “Company B Term Sheet”), (ii) a Black 
Diamond Fund Confidential Private Placement Memorandum dated March 2014 (“March 2014 
PPM”), (iii) subscription documents for Black Diamond Fund and its Cayman Islands feeder 
fund, (iv) a Black Diamond Capital Appreciation Fund, LP Due Diligence Questionnaire 
(“Questionnaire”), draft management and operating agreements for the special purpose vehicle 
that would act as the credit facility for the Company B project, and (v) a proposed Letter of 
Understanding (“Company B LOU”).  
33. The Company B Term Sheet stated that Company B would receive $8,875,000 in 
funding from an unidentified third party lender and that, in exchange, Company B w as first 
required to invest $1,950,000 with Black Diamond Fund.  The Company B Term Sheet provided 
that Company B could withdraw its money from the Fund immediately if the prospective lender 
did not commit to provide Company B with financing within 90 days. 
34. The March 2014 PPM was identical in all relevant respects to the September 2013 
PPM and contained the same representations described above in paragraph 25.  In the 

 14 
Questionnaire, Lattanzio and Black Diamond Fund further represented that (i) the Fund’s assets 
would be managed and invested by Lattanzio; (ii) Company B would have on-line access to its 
account activity, including monthly reports and audited financial statements; (iii) as of 
September 2013, the Fund already had $100 million in assets under management or in 
commitments and an average return of 18% since 2008; and (iv) the Fund was capable of 
managing up to $1 billion without additional staff or equipment.  The Company B LOU, similar 
to the Company A LOU, purported to modify the PPM by allowing for immediate redemption of 
Company B’s investment if it did not receive the promised financing within 90 days. 
35. In meetings and calls that took place in June and July 2014, Lattanzio and 
Associate A further represented to Company B that:  (1) the Fund already had over $800 million 
in assets under management and anticipated reaching $1 billion in the near future; (2) the credit 
facility would most likely come from Deutsche Bank, DBS Bank or Barclays, all of whom had 
purportedly worked with Black Diamond Fund in the past; (3) Company B’s $2 million would be 
held on deposit until the credit facility was finalized, at which point the $2 million would be 
pooled with approximately $48 million provided by other investors and invested with Deutsche 
Bank, DBS Bank or Barclays.  For the reasons discussed above, the foregoing representations 
were all false because the Black Diamond Fund had no meaningful investment track record, 
lacked anywhere near the assets touted by Lattanzio and had no ties to Deutsche Bank, DBS 
Bank or Barclays.  As he did with Company A’s money, Lattanzio stole the Company B money 
rather than invest it. 
36. On or about July 30, 2014, Company B’s Chief Investment Officer signed an 
Investment Management Agreement (“IMA”) providing that Black Diamond LLC and Lattanzio 
would be investment managers with respect to the funds invested by Company B.  The IMA 

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provided, among other things, that Black Diamond LLC and Lattanzio would manage the funds 
consistent with an investment strategy identical to that set out in the March 2014 PPM and that 
Company B had the right to immediate redemption of its investment if it did not receive the 
promised financing within 70 days, as opposed to the 90 day time period set forth in the 
Company B Term Sheet.     
37. In an August 15, 2014 email, Associate A reiterated to Company B that Lattanzio 
would invest its funds only in government securities or bank certificates of deposit.  On August 
21, 2014, a law firm in Georgia representing Company B wired $1,950,000 directly to the Black 
Diamond Fund’s brokerage account. 
38. As with Company A, a credit facility never materialized, and Lattanzio had no 
intention of returning the funds to Company B.  Nor did Company B ever receive on-line access 
to any account activity or any of the promised reports.  Instead, Lattanzio provided Company B 
with nothing more than a briefly operative email link purporting to show the funds on deposit 
with the Fund’s administrator and a letter claiming that Company B’s investment with the Fund 
already had earned almost $60,000.  As described below in paragraphs 39-43, Lattanzio knew or 
recklessly disregarded that the representations about the purported financing,  Black Diamond 
Fund’s supposedly successful track record, its purported investment strategy and the purported 
investment return on Company B’s money were, like the earlier representations, materially false 
and misleading, because he had already used, and was continuing to use, substantial amounts of 
money in the Fund to pay various personal expenses and had otherwise misappropriated, and was 
continuing to misappropriate, Fund assets. 

 16 
Lattanzio’s Theft of the Offering Proceeds 
39. Lattanzio misappropriated virtually all of the approximately $4 million that Black 
Diamond Fund received from Company A and Company B, as well as virtually all of an 
additional sum totaling over $1 million that he obtained from others who had previously invested 
with Lattanzio and the Fund.  Lattanzio used the Fund’s money to pay his own living expenses, 
purchase luxury goods and services, including a home in Montclair, New Jersey, and to pay other 
expenses for Girlfriend A and his children.  While Lattanzio did at times invest limited amounts 
of the money placed into the Fund, those investments were generally inconsistent with the 
purported investment strategy set out in the PPMs, and he ultimately liquidated those positions 
and stole the proceeds. 
40. During the relevant period, the investor funds received by the Black Diamond 
Fund were maintained in brokerage accounts at Brokerage Firm A in the name of the Black 
Diamond entities.  Lattanzio used the investor funds in those accounts as his own personal funds, 
sometimes directly taking funds from Black Diamond accounts to use for his own personal 
expenses, and sometimes first transferring the funds to his personal brokerage account at 
Brokerage Firm A.  Aside from the money put into the Fund by investors, the only other 
meaningful sources of income for Lattanzio, Black Diamond Fund and the other defendants 
during the relevant period were approximately $68,000 in Social Security payments from the 
account of his deceased wife for the benefit of his children (all of which was transferred to 
investment accounts for his children) and occasional deposits by Lattanzio and Girlfriend A 
totaling less than $150,000.  Lattanzio’s personal account at Brokerage Firm A, and his personal 
expenses during the relevant period, were funded and paid for almost entirely with money 
transferred directly or indirectly from the Black Diamond Fund account. 

 17 
41. For example, on December 24, 2013, the same day on which the Fund received 
$1,979,600 from Company A, Lattanzio began funding a payroll service that, in turn, wrote him 
regular payroll checks.  Two days later, Lattanzio wrote a $5,000 check from a Black Diamond 
Investments account to Girlfriend A and repaid over $45,000 owed on a credit card held jointly 
by him and Girlfriend A out of the same account.  Three days later, Lattanzio wired $124,000 
from a Black Diamond Fund account to a Land Rover dealer for a luxury vehicle that was 
registered in his name and used funds transferred from Black Diamond accounts to his personal 
account to purchase over $100,000 in merchandise from Tiffany & Co.  Over the next few 
weeks, Lattanzio spent large additional sums on personal expenses, including $58,000 for a “real 
estate investment” and over $40,000 in tuition to his children’s’ private school.  Lattanzio also 
made multiple payments to Associate A and a $134,000 payment to a Spanish law firm. 
42. Lattanzio depleted the $1,950,000 that the Fund received from Company B in 
similar fashion.  On August 21, 2014, the same day on which those funds were received by Black 
Diamond Fund, Lattanzio wired from the Black Diamond Fund account $19,500 (exactly 1% of 
the total Company B investment) to Associate A and $1,048,956 to a real estate escrow account 
for the purchase of a home in Montclair, New Jersey.  The deed for that home, in which 
Lattanzio now lives, is held in the name of the Nicholas Lattanzio 2014 Family Trust.  Over the 
next two weeks, Lattanzio wrote checks to himself for a total of $110,000, paid over $60,000 in 
credit card debt, and paid $24,000 to Salve Regina University for the benefit of Associate A’s 
daughter. 
43. In addition to the one-time expenses described above, Lattanzio used money from 
the Black Diamond Fund account to pay a total of (i) over $760,000 in personal credit card debt; 
(ii) over $60,000 in private school tuition; (iii) over $40,000 in country club expenses; (iv) over 

 18 
$30,000 to a yacht broker; and (v) at least $200,000 to himself through the Fund’s payroll 
service.  In addition, Lattanzio withdrew approximately $570,000 in the form of cash and checks 
payable to himself or Girlfriend A.  He also transferred over $130,000 to Associate A, plus at 
least $31,000 in additional funds paid out to Associate A through payroll, direct payments for 
Associate A’s utilities and payments to Associate A’s daughter’s university.  During the relevant 
time period, Lattanzio and the Fund engaged in only limited investment activity, primarily 
investing in stocks (often on margin) and futures, with net losses of approximately $233,000.  To 
date, Lattanzio has not returned to Company A or Company B any of the money that they 
transferred to Black Diamond Fund. 
Lattanzio’s Submission of False Documents to Commission Staff 
44. In response to a voluntary inquiry from Commission staff about, among other 
things, the Black Diamond Fund’s books and records, Lattanzio provided Commission staff with 
documents purporting to show that Black Diamond Fund had loaned $2 million to Girlfriend A 
in exchange for receiving a mortgage on real property in New Hampshire.  This transaction was 
fabricated, as no such loan is reflected in the Fund’s brokerage records.  In any event, using the 
Fund’s money to make a $2 million loan to Girlfriend A would have been a blatant misuse of 
Fund assets by Lattanzio even if such a loan had occurred. 
FIRST CLAIM FOR RELIEF 
Violations of Section 17(a) of the Securities Act 
(All Defendants) 
 
45. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
46. Defendants, directly or indirectly, singly or in concert, in the offer or sale of 
securities and by the use of the means of instruments of transportation or communication in 

 19 
interstate commerce, knowingly or recklessly have: (a) employed devices, schemes, or artifices 
to defraud; (b) obtained money or property by means of untrue statements of a material fact or 
omissions of a material fact necessary in order to make the statement made, in light of the 
circumstances under which they were made, not misleading; and/or (c) engaged in transactions, 
practices, or courses of business which operated or would operate as a fraud or deceit upon the 
purchaser. 
47. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 
have violated, and unless enjoined will again violate, Section 17(a) of the Securities Act [15 
U.S.C. § 77q(a)]. 
SECOND CLAIM FOR RELIEF 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 
(All Defendants) 
 
48. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
49. Defendants, directly or indirectly, singly or in concert, in connection with the 
purchase or sale of securities and by the use of the means or instrumentalities of interstate 
commerce or of the mails, or of the facilities of a national securities exchange, knowingly or 
recklessly have: (a) employed devices, schemes, or artifices to defraud; (b) made untrue 
statements of a material fact or omitted to state a material fact necessary in order to make the 
statement made, in light of the circumstances under which they were made, not misleading; 
and/or (c) engaged in acts, transactions, practices, or courses of business which operated or 
would operate as a fraud or deceit upon other persons. 

 20 
50. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 
have violated, and unless enjoined will again violate, Section 10(b) of the Exchange Act [15 
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 
THIRD CLAIM FOR RELIEF 
Violations of Sections 206(1) and 206(2) of the Advisers Act 
(Lattanzio, Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC) 
 
51. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
52. Lattanzio, Black Diamond Investments, Black Diamond GP and Black Diamond 
LLC at all relevant times were investment advisers within the meaning of Section 202(11) of the 
Advisers Act [15 U.S.C. § 80b-2(11)]. 
53. As investment advisers to Black Diamond Fund, Lattanzio, Black Diamond 
Investments, Black Diamond GP and Black Diamond LLC owed Black Diamond Fund fiduciary 
duties of utmost good faith, fidelity, and care to, among other things, make full and fair 
disclosure to it of all material facts, including any conflicts or potential conflicts of interest, as 
well as a duty to act in the best interests of Black Diamond Fund and not to act in their own 
interests to the detriment of Black Diamond Fund. 
54. As investment advisers to Company B, Lattanzio and Black Diamond LLC owed 
Black Diamond Fund fiduciary duties of utmost good faith, fidelity, and care to, among other 
things, make full and fair disclosure to it of all material facts, including any conflicts or potential 
conflicts of interest, as well as a duty to act in the best interests of Company B and not to act in 
their own interests to the detriment of Company B. 
55. During the relevant period, Black Diamond Fund, Lattanzio, Black Diamond 
Investments, Black Diamond GP, and Black Diamond LLC, by use of the mails, and the means 

 21 
and instrumentalities of interstate commerce, directly or indirectly, while acting as investment 
advisers, have knowingly or recklessly: (1) employed devices, schemes, or artifices to defraud 
clients or prospective clients; or (2) engaged in transactions, practices, and courses of business 
that operated as a fraud or deceit upon clients or prospective clients. 
56. By reason of the foregoing, Black Diamond Fund, Lattanzio, Black Diamond 
Investments, Black Diamond GP and Black Diamond LLC breached their fiduciary duties to 
Black Diamond Fund and have otherwise violated, and unless enjoined will again violate, 
Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 
FOURTH CLAIM FOR RELIEF 
Violations of Sections 206(4) of the Advisers Act and Rule 206(4)-8 
(Lattanzio, Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC) 
 
57. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
58. Lattanzio, Black Diamond Investments, Black Diamond GP, and Black Diamond 
LLC at all relevant times were investment advisers within the meaning of Section 202(11) of the 
Advisers Act [15 U.S.C. § 80b-2(11)]. 
59. By engaging in the conduct alleged above, Lattanzio, Black Diamond Investments, 
Black Diamond GP and Black Diamond LLC, directly or indirectly, while acting as investment 
advisers, have knowingly or recklessly:  (1) made untrue statements of material fact or omitted to 
state material facts necessary to make the statements made, in light of the circumstances under 
which they were made, not misleading, to investors or prospective investors in Black Diamond 
Fund; and (2) otherwise engaged in acts, practices or courses of business that were fraudulent, 
deceptive or manipulative with respect to investors or prospective investors in Black Diamond 
Fund. 

 22 
60. By reason of the foregoing, Lattanzio, Black Diamond Investments, Black 
Diamond GP, and Black Diamond LLC violated, and unless enjoined will again violate, Section 
206(4) of the Advisers Act [15 U.S.C. § 80b-6(4)], and Rule 206(4)-8 thereunder [17 C.F.R. 
275.206(4)-8]. 
FIFTH CLAIM FOR RELIEF 
Control Person Liability for Black Diamond Fund,  
Black Diamond Investments, Black Diamond GP 
and Black Diamond LLC’s Violations of 
Section 10(b) of the Exchange Act and Rule 10b-5 
(Lattanzio) 
61. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
62. As alleged above, Black Diamond Fund, Black Diamond Investments, Black 
Diamond GP and Black Diamond LLC violated Section 10(b) of the Exchange Act [15 U.S.C. § 
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 
63. During the relevant period, Lattanzio was a controlling person of Black Diamond 
Fund, Black Diamond Investments, Black Diamond GP and Black Diamond LLC for purposes of 
Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)]. 
64. As alleged above, Lattanzio knowingly or recklessly engaged in fraudulent 
conduct that resulted in violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] by Black Diamond Fund, Black Diamond 
Investments, Black Diamond GP and Black Diamond LLC. 
65. By reason of the foregoing, Lattanzio is liable as a controlling person pursuant to 
Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for Black Diamond Fund, Black Diamond 
Investments, Black Diamond GP and Black Diamond LLC’s violations of Section 10(b) of the 
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

 23 
SIXTH CLAIM FOR RELIEF 
Aiding and Abetting Liability for Black  
Diamond Fund, Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC’s 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 
(Lattanzio) 
 
66. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
67. As alleged above, Black Diamond Fund, Black Diamond Investments, Black 
Diamond GP and Black Diamond LLC violated Section 10(b) of the Exchange Act [15 U.S.C. § 
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 
68. As alleged above, Lattanzio knowingly or recklessly engaged in fraudulent 
conduct that resulted in violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] by Black Diamond Fund, Black Diamond 
Investments, Black Diamond GP and Black Diamond LLC. 
69. By engaging in the conduct alleged above, Lattanzio knowingly or recklessly 
provided substantial assistance to Black Diamond Fund, Black Diamond Investments, Black 
Diamond GP and Black Diamond LLC with respect to their violations of Section 17(a) of the 
Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 
70. By reason of the foregoing, Lattanzio is liable pursuant to Section 15(b) of the 
Securities Act [15 U.S.C. § 77o(b)] and Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)] 
for aiding and abetting Black Diamond Fund, Black Diamond Investments, Black Diamond GP, 
and Black Diamond LLC’s violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], 
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 
240.10b-5]. 

 24 
SEVENTH CLAIM FOR RELIEF 
Aiding and Abetting Liability for Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC’S Violations of 
Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 
(Lattanzio) 
71. The Commission realleges and incorporates by reference herein each and every 
allegation contained in paragraphs 1 through 44. 
72. As alleged above, Black Diamond Investments, Black Diamond GP and Black 
Diamond LLC violated Sections 206(1), 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 
80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 275.206(4)-8]. 
73. By engaging in the conduct alleged above, Lattanzio knowingly or recklessly 
provided substantial assistance to Black Diamond Investments, Black Diamond GP and Black 
Diamond LLC with respect to their violations of Sections 206(1), 206(2) and 206(4) of the 
Advisers Act [15 U.S.C. §§ 80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 
275.206(4)-8]. 
74. By reason of the foregoing, Lattanzio is liable pursuant to Section 209 of the 
Advisers Act for aiding and abetting the violations committed by Black Diamond Investments, 
Black Diamond GP, and Black Diamond LLC of Sections 206(1), 206(2) and 206(4) of the 
Advisers Act [15 U.S.C. §§ 80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 
275.206(4)-8]. 

 25 
PRAYER FOR RELIEF 
 
WHEREFORE, the Commission respectfully requests a Final Judgment: 
I. 
 
 Permanently enjoining Lattanzio, Black Diamond Fund, Black Diamond Investments, 
Black Diamond GP, and Black Diamond LLC from committing, aiding and abetting or otherwise 
engaging in conduct that would make them liable for the violations of the federal securities laws 
alleged in this complaint; 
II. 
 
 Ordering the Defendants, jointly and severally, to disgorge the ill-gotten gains they 
received as a result of the violations alleged in this complaint, and ordering each of them to each 
pay prejudgment interest thereon; 
III. 
 Ordering the Defendants to pay civil monetary penalties pursuant to Section 20(d) of the 
Securities Act [15 U.S.C. § 77t], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)], and 
Section 209 of the Advisers Act [15 U.S.C. § 80b-9]; and  
  

 26 
 
IV. 
 
Granting such other and further relief as the Court may deem just and proper. 
JURY DEMAND 
 Pursuant to Rule 39 of the Federal Rules of Civil Procedure, Plaintiff demands that this 
case be tried to a jury.  
Dated:  New York, New York     
 June 10, 2015 
 
       Respectfully submitted, 
 
 
/s/ Andrew M. Calamari 
Andrew M. Calamari* 
Sanjay Wadhwa* 
George N. Stepaniuk* 
Todd Brody 
David C. Austin* 
Counsel for Plaintiff 
U.S. Securities and Exchange Commission 
New York Regional Office 
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0080 (Brody) 
* Not admitted in New Jersey 
  

Andrew M. Calamari 
Sanjay Wadhwa 
George N. Stepaniuk 
Todd Brody 
David C. Austin 
Attorneys for Plaintiff 
U.S. SECURITIES AND EXCHANGE COMMISSION  
New York Regional Office 
200 Vesey Street, Suite 400 
New York, NY 10281-1022 
(212) 336-0080 (Brody) 

 
UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 
________________________________________________ 
        : 
SECURITIES AND EXCHANGE COMMISSION, : 
        : Civil No. 
     Plaintiff,  : 
        :  
  -against-     : Jury Trial Demanded 
        : 
NICHOLAS LATTANZIO,     : 
BLACK DIAMOND INVESTMENTS, LP,  : 
BLACK DIAMOND GP, LLC,    : 
BLACK DIAMOND INVESTMENTS LLC, AND : 
BLACK DIAMOND CAPITAL APPRECIATION : 
FUND, L.P.,       : 
        : 
     Defendants.  : 
________________________________________________: 

 
COMPLAINT 

 
Plaintiff Securities and Exchange Commission (“Commission”) alleges the following 

against defendants Nicholas Lattanzio (“Lattanzio”), Black Diamond Investments, LP (“Black 

Diamond Investments”), Black Diamond GP, LLC (“Black Diamond GP”), Black Diamond 

Investments LLC (“Black Diamond LLC”) and Black Diamond Capital Appreciation Fund, L.P. 

(“Black Diamond Fund” or “the Fund”) (collectively, “Defendants”): 



 2 

SUMMARY OF ALLEGATIONS 

1. This case involves an offering fraud perpetrated by Lattanzio, a purported hedge 

fund manager, who misappropriated approximately $5 million from private investors for his own 

personal use.  From in or around August 2011 to August 2014, Lattanzio offered and sold interests 

in the Black Diamond Fund, promising investors that their money would be used to make various 

lucrative investments.  Instead, Lattanzio simply stole most of the money he raised. 

2. According to the Fund’s private placement memorandum and other documents 

given to investors, the Fund’s “investment objective” was to “maximize income and capital 

appreciation by investing in a variety of highly liquid fixed income” securities using “proprietary 

investment strategies.”  While Lattanzio temporarily invested a limited amount of the investor 

money deposited into the Fund, he quickly depleted the Fund’s assets in order to finance a lavish 

lifestyle for himself and his family.  Among other things, he used Fund assets to purchase a $1 

million-plus home in Montclair, New Jersey, to repay over $760,000 in credit card debt, to buy a 

$124,000 luxury car and merchandise from Tiffany & Co. worth over $100,000, and to pay for 

his children’s tuition at an elite private school and his membership at an exclusive golf club.  He 

also withdrew over approximately $570,000 in cash or checks written to himself and his 

girlfriend (“Girlfriend A”), and paid over $30,000 to a yacht broker. 

3. Among the investors were two small companies that were looking for capital to 

finance their business activities.  Lattanzio, acting directly and through one or more representatives, 

told executives of the two small companies that they would be able to secure capital through a 

lending facility on the condition that the companies first invest with Black Diamond Fund a 

percentage of the capital they were seeking.  Lattanzio and his representatives also guaranteed that 



 3 

the companies could withdraw their money from the Fund in the event that the lending facility was 

not consummated within a specified period of time. 

4. As a result, each of the two companies invested approximately $2 million in the 

Black Diamond Fund, but neither company ever obtained financing and, despite repeated requests, 

Lattanzio never returned any of their money.  

5. By virtue of the conduct alleged herein, the Defendants, directly or indirectly, 

singly or in concert, violated and are otherwise liable for violations of the federal securities laws, 

as follows:  

(a) Each of the Defendants violated Section 17(a) of the Securities Act of 1933 

(“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];  

(b) Lattanzio, Black Diamond Investments, Black Diamond GP, and Black Diamond LLC 

violated Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (“Advisers 

Act”) [15 U.S.C. §§ 80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. § 

275.206(4)-8];  

(c) Lattanzio is also liable as a controlling person pursuant to Section 20(a) of the 

Exchange Act [15 U.S.C. § 78t(a)] for the violations committed by Black Diamond Fund, Black 

Diamond Investments, Black Diamond GP, and Black Diamond LLC of Section 17(a) of the 

Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

(d) Lattanzio is further liable pursuant to Section 15(b) of the Securities Act [15 U.S.C. § 

77o(b)] and Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)] for aiding and abetting the 

violations committed by Black Diamond Fund, Black Diamond Investments, Black Diamond GP, 



 4 

and Black Diamond LLC of Section 17(a) if the Securities Act [15 U.S.C. § 77q(a)], Section 

10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-

5]; and  

(e) In addition, Lattanzio is liable pursuant to Section 209 of the Advisers Act for aiding 

and abetting the violations committed by Black Diamond Investments, Black Diamond GP and 

Black Diamond LLC of Sections 206(1), 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 

80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 275.206(4)-8]. 

6. Unless the Defendants are permanently restrained and enjoined, they will again 

engage in the acts, practices, transactions and courses of business set forth in this complaint and 

in acts, practices, transactions and courses of business of similar type and object. 

JURISDICTION AND VENUE 

7. The Commission brings this action pursuant to authority conferred by Section 

20(b) of the Securities Act [15 U.S.C. § 77t(b)], Section 21(d)(1) of the Exchange Act [15 U.S.C. 

§ 78u(d)(1)], and Section 209(d) of the Advisers Act [15 U.S.C. §§ 80b-9(d)], and seeks to 

restrain and permanently enjoin the Defendants from engaging in the acts, practices, transactions 

and courses of business alleged herein.  In addition, the Commission seeks a final judgment 

ordering the Defendants to (i) disgorge their ill-gotten gains, together with prejudgment interest 

thereon, including an order holding each of the Defendants jointly and severally liable for the ill-

gotten gains of each of the other Defendants; (ii) pay civil monetary penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C. 

§ 78u(d)(3)], and Sections 209(e) and 209(f) of the Advisers Act [15 U.S.C. §§ 80b-9(e) and (f)]; 

and (iii) provide an accounting. 



 5 

8. This Court has jurisdiction over this action pursuant to 28 U.S.C. §1331, Sections 

20(b), 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d),77v(a)]; Sections 21(d), 

21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa], and Sections 209 and 

214 of the Advisers Act [15 U.S.C. §§ 80b-9, 80b-14].   

9. Venue is proper in this District pursuant to 28 U.S.C. §1391(b)(2), Section 22(a) 

of the Securities Act [15 U.S.C. §77v(a)], Section 27 of the Exchange Act [15 U.S.C. §78aa], 

and Section 214 of the Advisers Act [15 U.S.C. § 80b-14].  Many of the acts, practices, events, 

transactions, communications, courses of business and other matters alleged herein occurred in 

the District of New Jersey, including misrepresentations made to investors and misappropriation 

of investor funds.  Moreover, (i) Lattanzio resides in the District of New Jersey and/or resided 

there during the relevant period; and (ii) Black Diamond Fund, Black Diamond Investments, 

Black Diamond GP and Black Diamond LLC have their principal place of business in the 

District of New Jersey. 

10. In connection with the conduct alleged in this complaint, the Defendants, directly 

or indirectly, singly or in concert, have made use of the means or instruments of transportation or 

communication in, and the means or instrumentalities of, interstate commerce, or of the mails. 

THE DEFENDANTS 

11. Lattanzio, age 58, resides in Montclair, New Jersey and, during parts of the 

relevant period, also resided in West Orange, New Jersey.  Lattanzio is the 100% owner of Black 

Diamond Investments LLC, through which he controls Black Diamond Fund, Black Diamond 

Investments, LP and Black Diamond GP, LLC.  He also owns 90% of Black Diamond 

Investments, and the other 10% is owned by the Lattanzio Family Trust, of which he is Trustee.   



 6 

12. Black Diamond Fund is a Delaware limited partnership with its principal place 

of business in Montclair, New Jersey.  Black Diamond Fund serves as a purported investment 

vehicle for its limited partners.  Black Diamond Fund is advised and managed by Black Diamond 

Investments and the Fund’s general partner, Black Diamond GP.   

13. Black Diamond Investments is a New Jersey limited partnership with its 

principal place of business in Montclair, New Jersey.  Black Diamond Investments is an 

unregistered investment advisor for Black Diamond Fund.  The general partner of Black 

Diamond Investments is Black Diamond LLC.   

14. Black Diamond GP is a New Jersey limited liability company with its principal 

place of business in Montclair, New Jersey.  Black Diamond GP is the general partner of Black 

Diamond Fund and manages that entity.  The sole member of Black Diamond GP is Black 

Diamond LLC.   

15. Black Diamond LLC is a New Jersey limited liability company with its principal 

place of business in Montclair, New Jersey.  Black Diamond LLC is 100% owned by Lattanzio.  

Black Diamond LLC is the general partner of Black Diamond Investments and is the sole 

member of Black Diamond GP.   

RELEVANT INDIVIDUALS AND ENTITIES 

16. Company A is, upon information and belief, a Delaware corporation that has a 

principal place of business in New York, New York and is engaged in the oil and gas business. 

17. Company B is, upon information and belief, a Georgia limited liability 

corporation that has a principal place of business in Atlanta, Georgia and, through an affiliate, is 

engaged in the business of managing and developing hotels.     



 7 

18. Associate A is an individual who is associated with a purported lending company 

that shares a mailing address with Associate A in Southport, CT.  Through that company, 

Associate A acted as Lattanzio’s agent and, on Lattanzio’s behalf, solicited Company A and 

Company B, along with others, to participate in the Black Diamond Fund offering at issue here.   

THE DEFENDANTS’ FRAUDULENT SCHEME 

19. Through oral and written misrepresentations made by Lattanzio and by Associate A, 

acting on Lattanzio’s behalf, Lattanzio induced investors, including Company A and Company B, to 

transfer approximately $5 million to Black Diamond Fund for a purported investment in the Fund.  

Lattanzio and Associate A told investors, including Company A and Company B, that Black 

Diamond Fund would invest the funds in securities and, in at least some instances, that the 

investment would remain secure and liquid and subject to a guaranteed right of redemption.  

Lattanzio then stole virtually all the money invested in the Fund. 

20. According to Black Diamond Fund documents, Black Diamond Investments and 

Black Diamond GP advised and managed the Fund, while Black Diamond LLC was the general 

partner of Black Diamond Investments and sole member of Black Diamond GP.  In addition, an 

investment management agreement that Lattanzio entered into with at least one investor also 

identified Black Diamond LLC as an investment manager.  All three entities were owned and/or 

controlled by Lattanzio and operated as alter egos through which he purported to engage in the 

business of providing investment advice regarding securities for compensation.  According to 

Fund documents, Lattanzio was responsible, as an “investment advisor” and “principal decision 

maker,” for the selection of investments and the management of the Fund, and he held himself 

out to investors as an investment adviser.  In fact, Lattanzio’s posture as an investment adviser 

was simply a ruse to defraud the Fund’s investors. 



 8 

The Misrepresentations to Company A 
 
21. Upon information and belief, Company A is an entity that acquires distressed oil 

and gas assets and manages those assets.  In October 2013, while seeking external sources of 

funding, Company A was introduced to Associate A, who was acting as a representative of 

Lattanzio and Black Diamond Fund.  Associate A told officers of Company A that he was 

capable of arranging project financing for Company A in the form of a $20 million credit facility 

from a third party.  Associate A also told Company A that, as a condition for securing the credit 

facility, Company A would first be required to invest $2 million with Black Diamond Fund.  

22. In the course of those discussions, Associate A made, on Lattanzio’s behalf, a 

number of representations to Company A about Black Diamond Fund that were materially false 

and misleading.  Associate A provided Company A with a document titled “Project Financing 

Through Black Diamond and/or a Black Diamond ‘Funding Partner.’”  According to this 

document, the financing sought by Company A was to be provided either directly by Black 

Diamond Fund or through a “funding partner.”  In either scenario, Company A was required to 

make a “Capital Deposit” in the Fund, and the financing for Company A would take one of two 

forms.  If the financing was provided by a third party, it would be in the form of a loan to 

Company A by the third party.  If Black Diamond Fund was the source of the financing for 

Company A, it would be in the form of a “return on investment” made by Company A with the 

Fund.  The document further provided that if the financing was not made available to Company 

A within 120 days, Company A’s deposit could be withdrawn from the Fund immediately.   

23. In an October 22, 2013 email, Associate A further represented, on Lattanzio’s 

behalf, that Associate A would be “paid by Black Diamond and the funding entity on the back 

side,” and that “Black Diamond is relied upon to manage the funds on deposit in Black Diamond 



 9 

[so as] to pay any underwriting expenses necessary to close the loan without invading the 

principal deposit.”  In this email, Associate A reiterated that Black Diamond Fund would return 

the invested funds to Company A either upon a failure to finalize the credit facility within 120 

days or upon “90% funding” of the credit facility.  Associate A further told Company A that the 

funds would only be invested by Black Diamond Fund after the credit facility had been finalized, 

and would be maintained by Black Diamond Fund in a segregated account until that time. 

24. On or about December 2, 2013, Associate A also provided to Company A, on 

Lattanzio’s behalf, a document titled “Broad Terms Of A Proposal To Provide Funding To 

[Company A] For The Development Of Its Existing Oil Fields And Its Expansion Program” 

(“Company A Term Sheet”).  This document memorialized the terms described above, including 

the requirement that Company A “make a deposit of at least Two Million US Dollars 

($2,000,000) to a Capital Contribution Account through Black Diamond . . . in exchange for 

shares in the Black Diamond Capital Appreciation Fund LLP via a Private Placement 

Memorandum before underwriting or engagement of the lending process starts.”  The Company 

A Term Sheet reiterated that Company A could withdraw the full amount of its deposit from the 

Black Diamond Fund if the financing for Company A was not finalized within 120 days.  On or 

about December 5, 2013, Lattanzio and Company A’s CEO signed a Letter of Understanding 

(“Company A LOU”) setting out the terms described above and attaching a Black Diamond Fund 

Confidential Private Placement Memorandum (“September 2013 PPM”) dated September 2013.  

In the Company A LOU, the PPM and the other documents described herein, the Defendants 

made a number of representations that, as described more fully below, were materially false and 

misleading because, at the time, Lattanzio intended to and did steal virtually all the money 

placed into the Fund rather than invest it. 



 10 

25. According to the PPM, the Fund’s “investment objective” was to “maximize 

income and capital appreciation by investing in a variety of highly liquid fixed income” securities 

using “proprietary investment strategies,” including investing in (i) “investment grade fixed 

income financial instruments as a riskless principal, either as an intermediary between issuer and 

end-buyer, or through participating in the fixed income underwriting process as part of an 

underwriting syndicate;” and (ii) “callable and non-callable Triple-A rated debt obligations of the 

U.S. Treasury and the U.S. Agencies.”  The PPM also identified Lattanzio as managing member 

and “principal decision maker” for the Fund’s adviser and general partner, Black Diamond 

Investments and Black Diamond GP, respectively.  The Company A LOU purported to modify 

the PPM in two important respects, by providing Company A with a 120-day withdrawal 

guarantee for the $2 million that Company A was to invest in the Fund and by requiring the Fund 

to pay Company A 5% of the “performance” of Company A’s $2 million investment on an 

annual basis. 

26. On December 6, 2013, Associate A again represented to Company A in an email 

that Black Diamond Fund would “hold[] and manage[] your funds,” and that “your funds are 

secure and available to be returned at the end of 120 days in the unlikely event that you do not 

receive you [sic] funding” from the designated third party.  Associate A attached to this email an 

information sheet (“Information Sheet”) bearing a Black Diamond Fund heading and stating, like 

the PPM did, that the Fund’s “investment objective is to maximize income and capital 

appreciation by investing in a variety of highly-liquid fixed income instruments.”  The 

Information Sheet also stated that the Fund’s investment strategy had generated “historical pro 

forma returns” of 18.14% and over $900,000 in “cumulative portfolio earnings” per million 

dollars under management from January 2008 through March 2013. 



 11 

27. On December 9, 2013, Company A’s CEO signed the Company A Term Sheet 

and executed a Limited Partnership Agreement and Subscription Agreement, through which 

Company A purchased a limited partnership interest in Black Diamond Fund for $2 million.  

Representatives of Company A then met in person with both Lattanzio and Associate A at 

Company A's New York City offices on December 11, 2013.  At that meeting, Lattanzio and 

Associate A made further representations about the investment quality, asset size and prior 

performance of the Black Diamond Fund.  Specifically, Lattanzio and Associate A represented 

that the Black Diamond Fund was a well-established fund with a significant history, multiple 

investors, assets under management of approximately $100 million and an annual average return 

of 18 percent since 2008.   

28. On December 20, 2013, Company A’s largest investor transferred $2 million on 

Company A’s behalf to the Black Diamond Fund’s administrator, which in turn wired 

$1,979,600 to the Fund’s brokerage account on December 24, 2013. 

29. As Lattanzio knew or recklessly disregarded, the representations described in 

paragraphs 21-27 were materially false and misleading.  The fundamental premise that Lattanzio 

presented to Company A was completely false, as there was no credit facility forthcoming and 

Lattanzio had no intention of returning the funds to Company A.  Lattanzio did not maintain 

Company A’s funds in a segregated account, but rather began dissipating those funds while 

discussions about the purported credit facility were still ongoing.  The descriptions of the Fund’s 

investment strategy and track record of sizable returns were also materially false and misleading, 

as Black Diamond Fund had no meaningful investment track record of any kind, let alone a track 

record utilizing the strategy described in the PPM and other documents provided to Company A .  

Moreover, on April 14, 2014, Black Diamond Fund filed a petition to confirm an arbitration 



 12 

award in which the Fund stated that the only partners in the Fund were Lattanzio and Company 

A.  Similarly, on August 4, 2014, Black Diamond Fund filed a Form D with the Commission 

stating that the Fund had only sold $2 million in limited partnership interests – the amount sold 

to Company A.  The reference to "historical pro forma" returns in the Information Sheet was also 

false to the extent it purported to convey a proven track record of success, which the Fund 

lacked, and was, in any event, materially false and misleading because Lattanzio had no 

investment strategy and no track record at all – just a plan to steal money from Company A. 

30. After transferring the $2 million to the Black Diamond Fund’s administrator, 

Company A repeatedly sought information from Lattanzio about the status of the credit facility 

and, when it became apparent to Company A that the financing from a third-party was not 

coming to fruition, sought to redeem its investment.  In response, Lattanzio sought to dissuade 

Company A from persisting with its withdrawal request by falsely claiming that the financing 

was imminent or had been received and making other misrepresentations.  Among other things, 

Lattanzio falsely claimed, including in emails, that (i) he believed that Company A had received 

the promised credit facility; (ii) there had been investment activity in Company A’s account at 

the Fund and that he would provide information about the purported investment activity to 

Company A; (iii) he could not process the redemption request because of incorrect wire 

instructions or other technical problems; and (iv) a redemption would cause a loss to other 

investors in the Fund. 

31. As described below in paragraphs 39-43, Lattanzio knew or recklessly 

disregarded that these later representations were, like the earlier representations, materially false 

and misleading, because he had already used, and was continuing to use, substantial amounts of 



 13 

money in the Fund to pay various personal expenses and had otherwise misappropriated, and was 

continuing to misappropriate, Fund assets. 

The Misrepresentations to Company B 

32. Lattanzio defrauded Company B out of almost $2 million in similar fashion.  

Company B is involved in managing and developing hotels.  In June 2014, while seeking 

funding to finance development of a hotel in Georgia, Company B was introduced to Associate 

A.  As with Company A, Associate A acted as Lattanzio’s agent and, in fact, told Company B 

that he was an employee of Black Diamond.  Between July 23 and July 30, 2014, Associate A 

emailed Company B a number of documents setting out the terms of Black Diamond’s proposed 

financing arrangement, including (i) a broad term sheet (“Company B Term Sheet”), (ii) a Black 

Diamond Fund Confidential Private Placement Memorandum dated March 2014 (“March 2014 

PPM”), (iii) subscription documents for Black Diamond Fund and its Cayman Islands feeder 

fund, (iv) a Black Diamond Capital Appreciation Fund, LP Due Diligence Questionnaire 

(“Questionnaire”), draft management and operating agreements for the special purpose vehicle 

that would act as the credit facility for the Company B project, and (v) a proposed Letter of 

Understanding (“Company B LOU”).  

33. The Company B Term Sheet stated that Company B would receive $8,875,000 in 

funding from an unidentified third party lender and that, in exchange, Company B was first 

required to invest $1,950,000 with Black Diamond Fund.  The Company B Term Sheet provided 

that Company B could withdraw its money from the Fund immediately if the prospective lender 

did not commit to provide Company B with financing within 90 days. 

34. The March 2014 PPM was identical in all relevant respects to the September 2013 

PPM and contained the same representations described above in paragraph 25.  In the 



 14 

Questionnaire, Lattanzio and Black Diamond Fund further represented that (i) the Fund’s assets 

would be managed and invested by Lattanzio; (ii) Company B would have on-line access to its 

account activity, including monthly reports and audited financial statements; (iii) as of 

September 2013, the Fund already had $100 million in assets under management or in 

commitments and an average return of 18% since 2008; and (iv) the Fund was capable of 

managing up to $1 billion without additional staff or equipment.  The Company B LOU, similar 

to the Company A LOU, purported to modify the PPM by allowing for immediate redemption of 

Company B’s investment if it did not receive the promised financing within 90 days. 

35. In meetings and calls that took place in June and July 2014, Lattanzio and 

Associate A further represented to Company B that:  (1) the Fund already had over $800 million 

in assets under management and anticipated reaching $1 billion in the near future; (2) the credit 

facility would most likely come from Deutsche Bank, DBS Bank or Barclays, all of whom had 

purportedly worked with Black Diamond Fund in the past; (3) Company B’s $2 million would be 

held on deposit until the credit facility was finalized, at which point the $2 million would be 

pooled with approximately $48 million provided by other investors and invested with Deutsche 

Bank, DBS Bank or Barclays.  For the reasons discussed above, the foregoing representations 

were all false because the Black Diamond Fund had no meaningful investment track record, 

lacked anywhere near the assets touted by Lattanzio and had no ties to Deutsche Bank, DBS 

Bank or Barclays.  As he did with Company A’s money, Lattanzio stole the Company B money 

rather than invest it. 

36. On or about July 30, 2014, Company B’s Chief Investment Officer signed an 

Investment Management Agreement (“IMA”) providing that Black Diamond LLC and Lattanzio 

would be investment managers with respect to the funds invested by Company B.  The IMA 



 15 

provided, among other things, that Black Diamond LLC and Lattanzio would manage the funds 

consistent with an investment strategy identical to that set out in the March 2014 PPM and that 

Company B had the right to immediate redemption of its investment if it did not receive the 

promised financing within 70 days, as opposed to the 90 day time period set forth in the 

Company B Term Sheet.     

37. In an August 15, 2014 email, Associate A reiterated to Company B that Lattanzio 

would invest its funds only in government securities or bank certificates of deposit.  On August 

21, 2014, a law firm in Georgia representing Company B wired $1,950,000 directly to the Black 

Diamond Fund’s brokerage account. 

38. As with Company A, a credit facility never materialized, and Lattanzio had no 

intention of returning the funds to Company B.  Nor did Company B ever receive on-line access 

to any account activity or any of the promised reports.  Instead, Lattanzio provided Company B 

with nothing more than a briefly operative email link purporting to show the funds on deposit 

with the Fund’s administrator and a letter claiming that Company B’s investment with the Fund 

already had earned almost $60,000.  As described below in paragraphs 39-43, Lattanzio knew or 

recklessly disregarded that the representations about the purported financing, Black Diamond 

Fund’s supposedly successful track record, its purported investment strategy and the purported 

investment return on Company B’s money were, like the earlier representations, materially false 

and misleading, because he had already used, and was continuing to use, substantial amounts of 

money in the Fund to pay various personal expenses and had otherwise misappropriated, and was 

continuing to misappropriate, Fund assets. 



 16 

Lattanzio’s Theft of the Offering Proceeds 

39. Lattanzio misappropriated virtually all of the approximately $4 million that Black 

Diamond Fund received from Company A and Company B, as well as virtually all of an 

additional sum totaling over $1 million that he obtained from others who had previously invested 

with Lattanzio and the Fund.  Lattanzio used the Fund’s money to pay his own living expenses, 

purchase luxury goods and services, including a home in Montclair, New Jersey, and to pay other 

expenses for Girlfriend A and his children.  While Lattanzio did at times invest limited amounts 

of the money placed into the Fund, those investments were generally inconsistent with the 

purported investment strategy set out in the PPMs, and he ultimately liquidated those positions 

and stole the proceeds. 

40. During the relevant period, the investor funds received by the Black Diamond 

Fund were maintained in brokerage accounts at Brokerage Firm A in the name of the Black 

Diamond entities.  Lattanzio used the investor funds in those accounts as his own personal funds, 

sometimes directly taking funds from Black Diamond accounts to use for his own personal 

expenses, and sometimes first transferring the funds to his personal brokerage account at 

Brokerage Firm A.  Aside from the money put into the Fund by investors, the only other 

meaningful sources of income for Lattanzio, Black Diamond Fund and the other defendants 

during the relevant period were approximately $68,000 in Social Security payments from the 

account of his deceased wife for the benefit of his children (all of which was transferred to 

investment accounts for his children) and occasional deposits by Lattanzio and Girlfriend A 

totaling less than $150,000.  Lattanzio’s personal account at Brokerage Firm A, and his personal 

expenses during the relevant period, were funded and paid for almost entirely with money 

transferred directly or indirectly from the Black Diamond Fund account. 



 17 

41. For example, on December 24, 2013, the same day on which the Fund received 

$1,979,600 from Company A, Lattanzio began funding a payroll service that, in turn, wrote him 

regular payroll checks.  Two days later, Lattanzio wrote a $5,000 check from a Black Diamond 

Investments account to Girlfriend A and repaid over $45,000 owed on a credit card held jointly 

by him and Girlfriend A out of the same account.  Three days later, Lattanzio wired $124,000 

from a Black Diamond Fund account to a Land Rover dealer for a luxury vehicle that was 

registered in his name and used funds transferred from Black Diamond accounts to his personal 

account to purchase over $100,000 in merchandise from Tiffany & Co.  Over the next few 

weeks, Lattanzio spent large additional sums on personal expenses, including $58,000 for a “real 

estate investment” and over $40,000 in tuition to his children’s’ private school.  Lattanzio also 

made multiple payments to Associate A and a $134,000 payment to a Spanish law firm. 

42. Lattanzio depleted the $1,950,000 that the Fund received from Company B in 

similar fashion.  On August 21, 2014, the same day on which those funds were received by Black 

Diamond Fund, Lattanzio wired from the Black Diamond Fund account $19,500 (exactly 1% of 

the total Company B investment) to Associate A and $1,048,956 to a real estate escrow account 

for the purchase of a home in Montclair, New Jersey.  The deed for that home, in which 

Lattanzio now lives, is held in the name of the Nicholas Lattanzio 2014 Family Trust.  Over the 

next two weeks, Lattanzio wrote checks to himself for a total of $110,000, paid over $60,000 in 

credit card debt, and paid $24,000 to Salve Regina University for the benefit of Associate A’s 

daughter. 

43. In addition to the one-time expenses described above, Lattanzio used money from 

the Black Diamond Fund account to pay a total of (i) over $760,000 in personal credit card debt; 

(ii) over $60,000 in private school tuition; (iii) over $40,000 in country club expenses; (iv) over 



 18 

$30,000 to a yacht broker; and (v) at least $200,000 to himself through the Fund’s payroll 

service.  In addition, Lattanzio withdrew approximately $570,000 in the form of cash and checks 

payable to himself or Girlfriend A.  He also transferred over $130,000 to Associate A, plus at 

least $31,000 in additional funds paid out to Associate A through payroll, direct payments for 

Associate A’s utilities and payments to Associate A’s daughter’s university.  During the relevant 

time period, Lattanzio and the Fund engaged in only limited investment activity, primarily 

investing in stocks (often on margin) and futures, with net losses of approximately $233,000.  To 

date, Lattanzio has not returned to Company A or Company B any of the money that they 

transferred to Black Diamond Fund. 

Lattanzio’s Submission of False Documents to Commission Staff 

44. In response to a voluntary inquiry from Commission staff about, among other 

things, the Black Diamond Fund’s books and records, Lattanzio provided Commission staff with 

documents purporting to show that Black Diamond Fund had loaned $2 million to Girlfriend A 

in exchange for receiving a mortgage on real property in New Hampshire.  This transaction was 

fabricated, as no such loan is reflected in the Fund’s brokerage records.  In any event, using the 

Fund’s money to make a $2 million loan to Girlfriend A would have been a blatant misuse of 

Fund assets by Lattanzio even if such a loan had occurred. 

FIRST CLAIM FOR RELIEF 
Violations of Section 17(a) of the Securities Act 

(All Defendants) 
 

45. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

46. Defendants, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means of instruments of transportation or communication in 



 19 

interstate commerce, knowingly or recklessly have: (a) employed devices, schemes, or artifices 

to defraud; (b) obtained money or property by means of untrue statements of a material fact or 

omissions of a material fact necessary in order to make the statement made, in light of the 

circumstances under which they were made, not misleading; and/or (c) engaged in transactions, 

practices, or courses of business which operated or would operate as a fraud or deceit upon the 

purchaser. 

47. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated, and unless enjoined will again violate, Section 17(a) of the Securities Act [15 

U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 

(All Defendants) 
 
48. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

49. Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of the means or instrumentalities of interstate 

commerce or of the mails, or of the facilities of a national securities exchange, knowingly or 

recklessly have: (a) employed devices, schemes, or artifices to defraud; (b) made untrue 

statements of a material fact or omitted to state a material fact necessary in order to make the 

statement made, in light of the circumstances under which they were made, not misleading; 

and/or (c) engaged in acts, transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons. 



 20 

50. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated, and unless enjoined will again violate, Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

THIRD CLAIM FOR RELIEF 
Violations of Sections 206(1) and 206(2) of the Advisers Act 

(Lattanzio, Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC) 

 
51. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

52. Lattanzio, Black Diamond Investments, Black Diamond GP and Black Diamond 

LLC at all relevant times were investment advisers within the meaning of Section 202(11) of the 

Advisers Act [15 U.S.C. § 80b-2(11)]. 

53. As investment advisers to Black Diamond Fund, Lattanzio, Black Diamond 

Investments, Black Diamond GP and Black Diamond LLC owed Black Diamond Fund fiduciary 

duties of utmost good faith, fidelity, and care to, among other things, make full and fair 

disclosure to it of all material facts, including any conflicts or potential conflicts of interest, as 

well as a duty to act in the best interests of Black Diamond Fund and not to act in their own 

interests to the detriment of Black Diamond Fund. 

54. As investment advisers to Company B, Lattanzio and Black Diamond LLC owed 

Black Diamond Fund fiduciary duties of utmost good faith, fidelity, and care to, among other 

things, make full and fair disclosure to it of all material facts, including any conflicts or potential 

conflicts of interest, as well as a duty to act in the best interests of Company B and not to act in 

their own interests to the detriment of Company B. 

55. During the relevant period, Black Diamond Fund, Lattanzio, Black Diamond 

Investments, Black Diamond GP, and Black Diamond LLC, by use of the mails, and the means21 

and instrumentalities of interstate commerce, directly or indirectly, while acting as investment 

advisers, have knowingly or recklessly: (1) employed devices, schemes, or artifices to defraud 

clients or prospective clients; or (2) engaged in transactions, practices, and courses of business 

that operated as a fraud or deceit upon clients or prospective clients. 

56. By reason of the foregoing, Black Diamond Fund, Lattanzio, Black Diamond 

Investments, Black Diamond GP and Black Diamond LLC breached their fiduciary duties to 

Black Diamond Fund and have otherwise violated, and unless enjoined will again violate, 

Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 

FOURTH CLAIM FOR RELIEF 
Violations of Sections 206(4) of the Advisers Act and Rule 206(4)-8 

(Lattanzio, Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC) 

 
57. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

58. Lattanzio, Black Diamond Investments, Black Diamond GP, and Black Diamond 

LLC at all relevant times were investment advisers within the meaning of Section 202(11) of the 

Advisers Act [15 U.S.C. § 80b-2(11)]. 

59. By engaging in the conduct alleged above, Lattanzio, Black Diamond Investments, 

Black Diamond GP and Black Diamond LLC, directly or indirectly, while acting as investment 

advisers, have knowingly or recklessly:  (1) made untrue statements of material fact or omitted to 

state material facts necessary to make the statements made, in light of the circumstances under 

which they were made, not misleading, to investors or prospective investors in Black Diamond 

Fund; and (2) otherwise engaged in acts, practices or courses of business that were fraudulent, 

deceptive or manipulative with respect to investors or prospective investors in Black Diamond 

Fund. 



 22 

60. By reason of the foregoing, Lattanzio, Black Diamond Investments, Black 

Diamond GP, and Black Diamond LLC violated, and unless enjoined will again violate, Section 

206(4) of the Advisers Act [15 U.S.C. § 80b-6(4)], and Rule 206(4)-8 thereunder [17 C.F.R. 

275.206(4)-8]. 

FIFTH CLAIM FOR RELIEF 
Control Person Liability for Black Diamond Fund,  

Black Diamond Investments, Black Diamond GP 
and Black Diamond LLC’s Violations of 

Section 10(b) of the Exchange Act and Rule 10b-5 
(Lattanzio) 

61. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

62. As alleged above, Black Diamond Fund, Black Diamond Investments, Black 

Diamond GP and Black Diamond LLC violated Section 10(b) of the Exchange Act [15 U.S.C. § 

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

63. During the relevant period, Lattanzio was a controlling person of Black Diamond 

Fund, Black Diamond Investments, Black Diamond GP and Black Diamond LLC for purposes of 

Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)]. 

64. As alleged above, Lattanzio knowingly or recklessly engaged in fraudulent 

conduct that resulted in violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] by Black Diamond Fund, Black Diamond 

Investments, Black Diamond GP and Black Diamond LLC. 

65. By reason of the foregoing, Lattanzio is liable as a controlling person pursuant to 

Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for Black Diamond Fund, Black Diamond 

Investments, Black Diamond GP and Black Diamond LLC’s violations of Section 10(b) of the 

Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 



 23 

SIXTH CLAIM FOR RELIEF 
Aiding and Abetting Liability for Black  

Diamond Fund, Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC’s 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 
(Lattanzio) 

 
66. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

67. As alleged above, Black Diamond Fund, Black Diamond Investments, Black 

Diamond GP and Black Diamond LLC violated Section 10(b) of the Exchange Act [15 U.S.C. § 

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

68. As alleged above, Lattanzio knowingly or recklessly engaged in fraudulent 

conduct that resulted in violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] by Black Diamond Fund, Black Diamond 

Investments, Black Diamond GP and Black Diamond LLC. 

69. By engaging in the conduct alleged above, Lattanzio knowingly or recklessly 

provided substantial assistance to Black Diamond Fund, Black Diamond Investments, Black 

Diamond GP and Black Diamond LLC with respect to their violations of Section 17(a) of the 

Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

70. By reason of the foregoing, Lattanzio is liable pursuant to Section 15(b) of the 

Securities Act [15 U.S.C. § 77o(b)] and Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)] 

for aiding and abetting Black Diamond Fund, Black Diamond Investments, Black Diamond GP, 

and Black Diamond LLC’s violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5]. 



 24 

SEVENTH CLAIM FOR RELIEF 
Aiding and Abetting Liability for Black Diamond Investments,  
Black Diamond GP and Black Diamond LLC’S Violations of 

Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 
(Lattanzio) 

71. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 44. 

72. As alleged above, Black Diamond Investments, Black Diamond GP and Black 

Diamond LLC violated Sections 206(1), 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 

80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 275.206(4)-8]. 

73. By engaging in the conduct alleged above, Lattanzio knowingly or recklessly 

provided substantial assistance to Black Diamond Investments, Black Diamond GP and Black 

Diamond LLC with respect to their violations of Sections 206(1), 206(2) and 206(4) of the 

Advisers Act [15 U.S.C. §§ 80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 

275.206(4)-8]. 

74. By reason of the foregoing, Lattanzio is liable pursuant to Section 209 of the 

Advisers Act for aiding and abetting the violations committed by Black Diamond Investments, 

Black Diamond GP, and Black Diamond LLC of Sections 206(1), 206(2) and 206(4) of the 

Advisers Act [15 U.S.C. §§ 80b-6(1), (2) and (4)], and Rule 206(4)-8 thereunder [17 C.F.R. 

275.206(4)-8]. 



 25 

PRAYER FOR RELIEF 
 

WHEREFORE, the Commission respectfully requests a Final Judgment: 

I. 
 
 Permanently enjoining Lattanzio, Black Diamond Fund, Black Diamond Investments, 

Black Diamond GP, and Black Diamond LLC from committing, aiding and abetting or otherwise 

engaging in conduct that would make them liable for the violations of the federal securities laws 

alleged in this complaint; 

II. 
 
 Ordering the Defendants, jointly and severally, to disgorge the ill-gotten gains they 

received as a result of the violations alleged in this complaint, and ordering each of them to each 

pay prejudgment interest thereon; 

III. 

 Ordering the Defendants to pay civil monetary penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)], and 

Section 209 of the Advisers Act [15 U.S.C. § 80b-9]; and  

  



 26 

 

IV. 
 

Granting such other and further relief as the Court may deem just and proper. 

JURY DEMAND 

 Pursuant to Rule 39 of the Federal Rules of Civil Procedure, Plaintiff demands that this 

case be tried to a jury.  

Dated: New York, New York     
 June 10, 2015 
 
       Respectfully submitted, 
 

 
/s/ Andrew M. Calamari 
Andrew M. Calamari* 
Sanjay Wadhwa* 
George N. Stepaniuk* 
Todd Brody 
David C. Austin* 
Counsel for Plaintiff 
U.S. Securities and Exchange Commission 
New York Regional Office 
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0080 (Brody) 
* Not admitted in New Jersey