Real estate fund adviser will pay $9.7M for allegedly misleading investors

A former investment fund adviser from Centennial and his Greenwood Village-based real estate firms have agreed to pay $9.7 million to settle accusations that he misled investors.

Tom Vukota, who now resides in the Bahamas, established Vukota Capital Management and VCM Global Asset Management in 2010. They acquired numerous apartment buildings and hotels, such as the Miramar Apartments and Stratford at Lowry buildings in Denver.

Vukota, 52, and his companies controlled each property through a fund and sold interests in the funds to investors. In 2021, Vukota and VCM had 14 funds, each managing one apartment building, as per the U.S. Securities and Exchange Commission.

Four of those funds owned properties in Colorado Springs that were among the best-performing in VCM’s portfolio. In February and March 2021, Vukota decided to buy out other investors’ shares in the funds, which the SEC found misleading.

Allegedly, Vukota hid the fact that he was buying the interests himself and that each fund was about to receive substantial profits. Investors were not shown positive appraisals of the buildings.

“From the above course of conduct, Vukota received approximately $5.6 million of ill-gotten proceeds” by purchasing investors’ interests at low prices, according to the SEC.

The federal agency sued Vukota, Vukota Capital Management, and VCM Global Management for allegedly violating investment adviser and security laws. In addition to the buyout scheme, Vukota also caused the funds to lend money to VCM at below-market rates without disclosing it to investors, the SEC alleged.

The commission filed its lawsuit upon reaching a settlement with Vukota. Under the deal, he and his firm did not admit wrongdoing but agreed to pay $9.7 million to the government.

A lawyer for Vukota, Sam Lieberman at the Sadis firm in New York, declined to comment.

This story was originally published by BusinessDen.

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