Thursday, April 14, 2016

What is next for Jay Peak?

There is a bit a shitshow going on in the Jay Peak and Burke Mountain head offices right now. The resorts' owners, Ariel Quiros and Bill Stenger, are in some hot water with the Securities and Exchange Commission over misappropriation of EB-5 funds. Ooops. Here is the press release:

SEC Case Freezes Assets of Ski Resort Steeped in Fraudulent EB-5 Offerings

Washington D.C., April 14, 2016 — The Securities and Exchange Commission today announced fraud charges and an asset freeze against a Vermont-based ski resort and related businesses allegedly misusing millions of dollars raised through investments solicited under the EB-5 Immigrant Investor Program.

The SEC’s case was unsealed today in federal court in Miami, and the court has appointed a receiver over the companies to prevent any further spending of investor assets.
The SEC alleges that Ariel Quiros of Miami, William Stenger of Newport, Vt., and their companies made false statements and omitted key information while raising more than $350 million from investors to construct ski resort facilities and a biomedical research facility in Vermont.  Investors were told they were investing in one of several projects connected to Jay Peak Inc., a ski resort operated by Quiros and Stenger, and their money would only be used to finance that specific project.  Instead, in Ponzi-like fashion, money from investors in later projects was misappropriated to fund deficits in earlier projects.  More than $200 million was allegedly used for other-than-stated purposes, including $50 million spent on Quiros’s personal expenses and in other ways never disclosed to investors.
According to the SEC’s complaint, Quiros improperly tapped investor funds for such things as the purchase of a luxury condominium, payment of his income taxes and other taxes unrelated to the investments, and acquisition of an unrelated ski resort.
“The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement.  “As alleged in our complaint, the defendants diverted millions of EB-5 investor dollars to their own pockets, leaving little money for construction of the research facility investors were told would be built and thereby putting the investors’ funds and their immigration petitions in jeopardy.”
The SEC’s complaint charges Quiros, Stenger, Jay Peak, and a company owned by Quiros called Q Resorts Inc. as well as seven limited partnerships and their general partner companies with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  Four other companies are named as relief defendants in the SEC’s complaint for the purpose of recovering investor funds transferred into their accounts.  The SEC seeks preliminary and permanent injunctions, financial penalties, and disgorgement of ill-gotten gains plus interest.  The agency also seeks conduct-based injunctive relief against Quiros and Stenger along with an officer-and-director bar against Quiros.
The SEC’s investigation was conducted by Brian Theophilus James, Trisha D. Sindler, Michelle Lama, and Mark Dee, and the case was supervised by Chedly C. Dumornay of the Miami Regional Office.  The SEC’s litigation will be led by Christopher Martin and Robert K. Levenson of the Miami office.  The SEC appreciates the assistance of the Office of the Vermont Attorney General and other authorities in Vermont

The "good" news is that Jay Peak is currently operating under a new management company and our pal Steve Wright has been appointed General Manager.  We like Steve and wish him all the best in his new, but somewhat awkward, leadership position. It is probably not the promotion scenario he was hoping for.

I'm thinking that we should probably just give up on the West Bowl and a relocated Bonaventure Chair for the mean time. I hope the hardworking staff of Jay Peak and Burke Mountain will come out of this with jobs.

Makes you wish for the good old days, doesn't it? (photo by Harvey)


  1. I loved Stateside! All the best to Steve, hope it all works out.

  2. Ooops is right. Maybe I'm naive, but it's shocking how far off track this project got before the fraud was brought to light. I hope there's eventually a happy ending to this for Jay Peak.

    1. It is quite unbelievable, really. Maybe MSS will buy it back and it will be Canadian cash at par for everything!