Plea Bargain Near For Torkelsen?

John Torkelsen earned millions of dollars explaining how stockholders had been damaged by the actions of public companies, but – in serious legal difficulties himself – he may be ready to supply information that could convict his former clients.

Torkelsen and members of his family had been charged with the theft of $1.9 million of Acorn Technology Fund monies and the misapplication of $32 million in federal funds. Now, perhaps because he has struck a plea bargain, Torkelsen is expected to plead guilty to a lesser charge – providing false information to a government agency. This plea is going to be filed in a D.C. federal court on October 21, according to an article by Justin Scheck in the California-based law journal, the Recorder (www.law.com).

Prosecutors apparently hope to use Torkelsen to aid their prosecution of former Milberg Weiss attorney William Lerach, known as the king of shareholder class action suits. Lerach was one of Torkelsen’s chief clients. Starting in the 1980s Torkelsen made his fortune as an expert witness for valuations of technology companies, and he funded such companies as Mikros Systems, Princeton Video Image, and VeriVoice. At one point he had 47 people at 5 Vaughn Drive plus an office in San Diego.

Prosecutors in California have been trying for five years to indict Lerach. The Recorder article notes that it would be a major coup for the prosecutor to get Torkelsen to talk. "Flipping Torkelsen would be the end of the semblance of order as we know it," said a plaintiff securities lawyer, quoted anonymously in the Recorder article.

Adds a former associate of Torkelsen in Princeton, who declined to be identified: "The news spread through the legal community like wildfire."

Torkelsen faces both civil and criminal charges concerning Acorn Technology Fund, a venture capital fund for start-up and early stage technology companies founded in 1997. Acorn Technology Fund had obtained certification as a Small Business Administration Small Business Investment Company (SBIC) so that the federal government could match private investment dollars.

When the technology bubble broke, Acorn’s investments lost value, and the SBA tried unsuccessfully to recover its funds. Torkelsen faces a civil charge in a Philadelphia court that he fraudulently obtained and misapplied $32 million in government funds and that he funneled some of those funds to family members. But D.C. prosecutors are reportedly pursuing criminal charges.

To make this case even more hazardous for those involved, more than a dozen Acorn investors turned out to be securities lawyers. In addition to Lerach they include former SEC commissioner Richard Roberts, who served on the SEC from 1990 to 1995. He invested in the fund in 1997 and is now a partner in a Washington, D.C.-based law firm, Thelen Reid & Priest. Philadelphia-based attorney-investors included Leonard Barrack of Barrack, Rodos & Bacine; and Nicholas Chimicles of Chimicles & Tikellis.

Torkelsen’s wife of 15 years, Pamela, made a plea bargain on a criminal charge early this year. Though she has not yet been sentenced for transporting stolen or fraudulently obtained property across state lines, insiders say she might receive three years in prison.

Securities Firm Expansions: Tapestry

Tapestry Asset Management, 136 Main Street, Suite 305, Princeton Forrestal Village, Princeton 08540. Afroz Qadeer, partner. 609-520-4046; fax, 609-613-4235. Home page: www.tapestryam.com

An independent investment firm launched by former Goldman Sachs hedge fund managers expanded last month at Princeton Forrestal Village, going from HQ to its own office on Main Street. Tom Romano of GVA Williams Buschman represented Tapestry in its current lease for 2,200 square feet.

Afroz Qadeer, one of the two partners in the Princeton office, says he considers the firm to be a "hedge fund factory." "Our offerings are designed to be easily scalable and capable of suiting most investor needs and market environments," says Qadeer.

Qadeer grew up on a farm near Nepal, went to the University of Bombay, Class of 88, and earned his MBA at Wharton. After working for two alternative investment firms as a hedge fund manager, he moved to Goldman Sachs in Princeton (formerly the Commodities Corporation on Poor Farm Road). He is married, and his wife works for an insurance company in Manhattan.

Qadeer and Jon Knudsen left Goldman Sachs in 2002 to launch this company at HQ.

Knudsen grew up in Michigan, where his father was an attorney, and after graduating in 1979 from the University of Denver, he was a trader on the floor of the Chicago Mercantile Exchange for Manufacturers Hanover. After taking his turn in the Euro dollar futures pit, he was transferred to the private bank in Manhattan, where he worked on derivative accounts for corporate clients, primarily Japanese. In 1999 Goldman Sachs recruited him from what was now called Chase Manhattan. In the Princeton office on Poor Farm Road, he was in charge of the macro trading allocations portfolio. He and his wife, a regional vice president at Lenscrafters, have a teenaged daughter.

A name like Tapestry evokes an image of different strands woven into a piece of art, says Knudsen. In hedge fund terms, says Knudsen, the tapestry refers to combining different hedge funds with different styles, markets, and focuses. He refers to his firm’s multi-manager hedge fund vehicles that include several hedge fund managers of varying styles, sort of a "fund of hedge funds."

Soon the Tapestry office will boast its own custom motif, a four-foot by five foot tapestry that he received as a gift several years ago and is bringing to the office. Woven into the fabric are images of price quote boards, old chalk boards, and the Chicago Board of Trade.

Securities Firm Expansion: Kirlin

Kirlin Securities Inc. (KILN), 103 Carnegie Center, Suite 101, Princeton 08540. Joe Betti and Patrick Hehir. 609-987-0500; fax, 609-987-2299. Home page: www.kirlin.com

Kirlin Securities moved from 2,800 square feet at 29 Emmons Drive to 3,300 feet at the Carnegie Center in September. The full-service broker was formerly known as Princeton Securities. Founder Ken Kamen sold it to Kirlin Securities in 2000 and is now with Mercadien Capital.

"We tend to concentrate on small cap or even microcap stocks with no long term debt," says Joe Betti, branch manager. He says his clients are aggressive retail investors nationwide, with accounts from $100,000 to $3 million or $4 million, plus institutional investors.

Because Kirlin recently sold off its retail brokerages, this office will soon be known by the name of its new owner, S.W. Bach (www.swbach.com).

Crosstown Move: Nai Fennelly

At some broker open houses, gifts proliferate. Show up and you get a golf umbrella with the broker’s name emblazoned on it. At Jerry Fennelly’s last open house, he gave away cash instead. Every 15 minutes he drew a business card out of a jar and peeled bills off a roll in his wallet.

Fennelly continues in that style at an open house for brokers on Friday, October 14, at Ibis Plaza, 3535 Quakerbridge Road in Hamilton from noon to 2 p.m. Lunch will be served in Suite 908, the new headquarters for Fennelly’s office, which moved from another suite at 3525 Quakerbridge Road last week (www.fennelly.com).

The luncheon will be hosted by Christopher Jerjian, whose family has owned Ibis Plaza since 1982. A graduate of Leicester University in the United Kingdom, Jerjian has an MBA from New York University.

Brokers will be invited to view newly completed "on spec" units ranging from 1,000 to 5,000 square feet, and of course everyone wants to see the new space. But let’s be honest, ears will really perk up when, at 15 minute intervals, Fennelly draws someone’s business card and hands over another $50.

NAI Fennelly Inc., 3525 Quakerbridge Road, Ibis Plaza, Suite 908, Hamilton 08619-1209. Gerard J. Fennelly, president. 609-520-0061; fax, 609-631-9208. Www.fennelly.com

Residential Mortgage Software

Visionet Systems Inc., 3 Cedar Brook Drive, Cedar Brook Corporate Center, Cranbury 08512. Aezaz Hussain, CEO. 609-452-0700; fax, 609-655-5232. Home page: www.visionetsystems.com

How to divvy up the profits from the residential mortgage business is a complicated piece of work for accountants and regulators. Visionet Systems has software to do that, a new product for the residential mortgage industry called VisiHCLAS (High Cost Lending Analysis and remediation System).

It helps auditors determine if a loan complies with the local, state or federal laws and regulations. It similarly helps the loan originators figure out what fees should go to whom.

Clean Energy

New Jersey American Water Company, 989 Lenox Drive, Suite 224, Lawrenceville 08648. Andrew Chapman, president. 609-512-9400; fax, 609-512-3680. Home page: www.americanwater.com

On Tuesday, October 11, New Jersey American Water was scheduled to debut the state’s largest ground-mounted solar electric system at its Canal Road water treatment plant in Somerset. The 500-kilowatt ground-mounted system was designed and built by Dome-Tech Solar, and it has more than 2,800 solar panels.

During peak production periods, the electricity produced by the solar system would be enough to meet the average electricity demand of more than 500 homes.

Contracts Awarded

Palatin Technologies Inc. (PTN), 4C Cedar Brook Drive, Cedar Brook Corporate Center, Cranbury 08512. Carl Spana PhD, president & CEO. 609-495-2200; fax, 609-495-2201. Home page: www.palatin.com

King Pharmaceuticals (KG), 7 Roszel Road, Fifth Floor, Princeton 08540. 609-580-8000; fax, 423-274-2520. Home page: www.kingpharm.com

Palatin has received a $10 million milestone payment from King Pharmaceuticals, based on its development of PT-141 for the treatment of male and female sexual dysfunction. King Pharmaceuticals has an office on Roszel Road and is based in Bristol, Tennessee.

"With ongoing Phase 2 trials in both male and female sexual dysfunction patients, the commercial development program is in full swing and we look forward to the successful and continued advancement of the program towards Phase 3 pivotal trials," says Stephen T. Wills, Palatin’s CFO.

Architecture Firm Contracts

Spiezle Architectural Group, 120 Sanhican Drive, Trenton 08618. Scott R. Spiezle AIA, president. 609-695-7400; fax, 609-695-1753. Home page: www.spiezle.com

The Spiezle Architectural Group will design a full-service facility for the Greater Trenton Area YMCA on South Broad Street across from the Mercer County Administration Building, an 8.5 acre site that used to be occupied by Apex Lumber Yard.

Among Spiezle’s recent contracts were a master plan for Rider University’s campus in Lawrence and the Westminster Choir College in Princeton Borough.

V. J. Scozzari & Son Inc., the construction manager for the project, expects to break ground in about 15 months.

Management Moves

YWCA Trenton, 140 East Hanover Street, Trenton 08608. 609-396-8291; fax, 609-989-8696.

Jose A. Hernandez, just announced as the new CEO of YWCA Trenton, was most recently the director of development for Renew International, a 25 million-member organization that aims to strengthen communities and encourage social outreach.

A native of Mexico, he has degrees in counseling and theology from Iona College in New Rochelle, New York. He has also directed a soup kitchen.

Library Expands

Faridy Veisz Fraytak PC, 1515 Lower Ferry Road, Box 7371, Trenton 08628. 609-883-7101; fax, 609-883-2694. www.FVFpc.com.

Mary Jacobs Memorial Library, 64 Route 518, Rocky Hill 08553. Helen Morris, director. 609-924-7073; fax, 609-924-7668.

After five years of fundraising and construction, the Mary Jacobs Memorial Library has reopened, having doubled in size. A VIP party is planned for Friday, October 14, and a community gathering for Saturday, October 15, 2 to 4 p.m.

"The community has stepped up to help us build this library," says Brenda Fallon, a former staffer at U.S. 1 who chairs the three-person trustee board of the Mary Jacobs Library Foundation. The other members are Tony Bianculli, former mayor of Rocky Hill, and Lane Taylor, of Stradley Ronan Stevens & Young, which handled the estate of Harold Jacobs.

Built as a private library in 1974 from money given by Jacobs in memory of his late wife, who had grown up in Rocky Hill, it now serves all of Montgomery Township. In an unusual arrangement, the foundation owns the building and furniture and pays for its maintenance and repair, but Somerset County provides the books, salaries and benefits, computers, and the automation system.

Jim Faridy, John Veisz, and Peter Furguiele of Faridy Veisz Fraytak, designed the new addition, a two-story brick and wood building in a wooded setting. "It was first conceived as looking like a barn that would fit into an 18th century town, and we have kept it that way through these additions," says Fallon. "We were very conservative, with no frills, but trying to provide the best technology for our patrons. And we are very child oriented." The library has nearly as many books for children as for adults.

The addition includes a children’s wing with windows that look out on the woods, meeting rooms for the community, space for 20 computers, and seating for quiet study.

Corporate and individual donations comprised $2 million of the $2.6 million construction cost, and the remainder came from grants, including a New Jersey Library Construction Grant amounting to $525,000. Central Jersey Nursery did the landscaping and 3M provided the security system.

Among the other donors were Trap Rock, J&J, Bloomberg, Bristol-Myers Squibb, Amboy National, Dow Jones, Princeton Real Estate Group. Hilton Realty, RBC Dain Rauscher, PNC Bank, Church & Dwight, Bollinger Insurance, Van Cleef Engineering, J&R Associates, and Presbyterian Homes.

Deaths

Nancy R. Piljar Long, 64, on October 8. She coordinated care at Mercer-Bucks Orthopedics on Princeton Pike.

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