A federal judge has permanently banned Dobbs Ferry investment adviser Jeremiah Silkowski from the securities industry and ordered him to pay a $200,000 civil penalty, capping a Securities and Exchange Commission lawsuit that accused him of hiding deteriorating fund values from investors for years. U.S. District Judge Jed S. Rakoff issued the sanctions in Manhattan federal court after Silkowski and his firm, SQN Capital Management LLC, consented to the penalties.
Silkowski has served as SQN's president, CEO and chief compliance officer, according to Westfair Communications, which first reported the ruling. SQN has been registered as an investment adviser since 2012. The SEC filed its lawsuit against Silkowski and SQN on September 18, 2026, alleging the firm kept four investment funds open well beyond their required liquidation dates. Those funds — SQN Alternative Investment Fund III L.P., Alternative Investment Fund IV L.P., SQN Portfolio Acquisition Company LLC, and SQN Special Opportunity Fund, LLC — pooled investor capital into industrial equipment leases and asset financing, according to court filings reported by FX News Group.
SQN Capital Management reported managing $75.4 million in discretionary assets, with majority control held by SQN Capital Partners LLC, an entity controlled by Silkowski, according to Radient Analytics. The firm, founded in 2007, focused primarily on equipment leasing and asset-backed debt arrangements.
SEC Alleges Years of Inflated Valuations
According to the Westfair report, Silkowski and SQN did not use an accountant to audit the funds or prepare unaudited annual financial statements from 2019 to 2025, despite the funds' governing documents requiring audits and annual financial statements. The SEC lawsuit alleges that Silkowski told investors fund assets were calculated by an independent valuation expert, while in fact he inflated fund asset values by leaving numbers unchanged despite deteriorating market conditions, performance or asset holdings.
The fund investments included equipment and marine vessels, per the SEC complaint cited by Westfair. Pandemic-related disruptions affected the market for those assets.
The SEC also alleges that early redeemers received a greater share of assets than they were entitled to, depleting fund assets through early share redemptions while Silkowski concealed declining asset values for years and told investors SQN was near selling assets and liquidating the funds to distribute money to them, according to the complaint as reported by Westfair.
Charges Filed Under Fiduciary-Duty Statute
The SEC's September 18, 2026 complaint charged SQN Capital under Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940, and charged Silkowski under Sections 206(1) and 206(2) and with aiding and abetting SQN's violations of Section 206(4) and related rules, according to Westlaw Today. Those provisions sit alongside Rule 206(4)-2, the Investment Advisers Act's so-called Custody Rule, which requires registered advisers managing pooled investment vehicles to distribute GAAP-compliant audited financial statements to investors within 120 days of each fiscal year-end or undergo annual surprise examinations by an independent accountant, per an explainer from Databento.
This was not the SEC's first run-in with SQN over that rule. In September 2020, the agency issued a cease-and-desist order censuring SQN Capital and imposing a $75,000 civil penalty for failing to deliver GAAP-compliant audited annual financial statements to private fund investors from 2012 through 2019, according to records from the U.S. Securities and Exchange Commission. The SEC brought a second administrative proceeding against SQN Capital and Silkowski in September 2023, fining the firm $200,000 and Silkowski $100,000 for repeated custody and compliance rule failures across its funds from 2019 through 2022, according to the SEC's 2023 order. FX News Group also reported that Silkowski was charged with aiding and abetting the violations.
Both prior proceedings ended with cease-and-desist orders and fines, but SQN's compliance troubles reportedly continued afterward. Reporting by Hannah Howell NewsDesk indicates that SEC court filings showed SQN Capital paid only $60,000 of its $200,000 civil penalty from the 2023 settlement and failed to retain an independent compliance consultant as mandated by that order.
Receiver Ordered to Wind Down Remaining Funds
A receiver was appointed for SQN's funds. The October 8, 2026 final consent judgment permanently barred Silkowski from the industry, according to court records filed with the U.S. District Court for the Southern District of New York.
SQN Capital and Silkowski have pushed back publicly on the SEC's framing of the case. In an October 12 statement distributed via PR Newswire, the firm and Silkowski said the SEC complaint contains no allegations of misuse of investor funds or personal enrichment, and noted that investors in the firm's two largest funds had previously received back between 51% and 65% of their initial capital. The statement also said SQN distributed nearly $20 million to fund investors in 2020 as part of an initial liquidation phase before market conditions stalled sales of remaining illiquid holdings, attributing the delays to hard-to-sell assets like marine vessels and pandemic disruptions, and claiming the firm subsidized fund operations for over five years before running out of compliance resources.
