Jeremiah Silkowski and SQN Capital Management Voluntarily Settle with SEC, Exit Advisory Business

EmitenTrust.com After years of subsidized operations, the funds pass to a court-appointed receiver. Settlement includes no admission of wrongdoing and a path to closing the long-overdue funds.

NEW YORK, Oct. 12, 2026 /PRNewswire/ -- SQN Capital Management, LLC ("SQN") and Jeremiah Silkowski, its sole remaining partner, have settled a complaint with the U.S. Securities and Exchange Commission and will exit the investment advisory business with an agreement that will result in the wind-down of the firm's remaining equipment leasing funds. Silkowski voluntarily offered to exit the advisory business, and that offer was accepted as part of the resolution. The complaint resolved by the settlement contains no allegation of misuse of investor funds or of personal benefit from any of the alleged violations.

The SQN funds invested in portfolios of equipment leases, equipment-backed loans, and asset financing arrangements. Investors received regular cash distributions during each fund's operating period. Together with early liquidation distributions, investors in the two largest SQN funds received back between 51% and 65% of their initial capital. The investments remaining after those distributions were largely residual interests in assets such as marine vessels, which were illiquid with no expected net cash flow until sold or refinanced.

Liquidations were delayed by the onset of the COVID-19 pandemic and remained delayed for more than five years, during which time SQN subsidized the operations of the remaining funds due to the lack of cash flow coming from the majority of the remaining investments, including the funds' largest assets. After more than a year of engagement with the Commission, SQN no longer had the resources to support both continued fund management operations and the regulatory compliance required to remain in good standing.

The Commission's allegations rest in part on the view that SQN overstated investment values by not adjusting the carrying value of fund units after the start of the pandemic. SQN maintained those values based on a series of potential exit opportunities which, for different reasons, failed to materialize. Those efforts are evidenced by a number of actions, including the nearly $20,000,000 distribution made to investors in 2020 as the first phase of the planned liquidation.

Subsequent to that distribution, and as additional evidence of the efforts being undertaken, SQN spent a considerable amount of time and its own resources bringing to market a roll-up transaction that specifically identified the SQN assets for sale to a group of investors representing more than $200 million, put together by an overseas boutique investment advisory firm. The roll-up investment vehicle was registered and partially funded before market dynamics and other matters delayed the consummation of the transaction, at which point the investors fell away. SQN also continued its efforts to market and sell the portfolios to insurance companies, the exit strategy used for SQN's first two funds, which resulted in IRRs of more than 10% for investors in those funds.

To the extent that the SEC raised concerns that investors may have been disadvantaged by redemptions issued by the funds during the period when the valuations were not adjusted, it should be noted that the cash to fund those redemptions was primarily contributed by SQN as a fund subsidy, out of SQN's already limited resources. Those redemptions mainly went to investors experiencing extreme hardship, including dual job loss, foreclosure, a seriously sick child, cancer treatment, deceased spouses, Alzheimer's and elder care, and other tragic life events.

During the period in question, there was no active market in which an investor could, or did, acquire or readily dispose of units in the SQN funds. The funds were illiquid at all points, no secondary market existed, or exists, for the units, and no investor was materially disadvantaged by relying on the information provided by SQN.

"The staff of the SEC are highly competent people carrying out an important public function. The staff handled their undertaking with regard to SQN with diligence and professionalism," said Jeremiah Silkowski. "Unfortunately, SQN did not have the resources required to adequately respond to all of the SEC's inquiries, which resulted in adverse findings that otherwise may have been rectified or shown to be incorrect if SQN had sufficient means available. We made the decision to put the funds and their investors first by using the limited resources available to pay the operating expenses of the funds and issue K-1s to investors. Like investors, SQN wants these funds liquidated, and the settlement is a path to this end."

SQN's prior history of regulatory fines, which the SEC characterizes as recidivist conduct, began with a dispute with a service provider, led by former partners of SQN, that withheld the books and records of the funds. SQN and Silkowski did not have the resources both to continue subsidizing the operations and liquidation of the funds and to engage in a costly legal dispute to compel the servicer to hand over the records. This matter remains ongoing.

Following the settlement, the fund liquidations will be handed over to a court-appointed receiver. SQN Capital Management will write off all amounts due from and contributed to the funds and will cooperate with the receiver to facilitate the closure of the funds.

Media Contact:
Ali V. Mirghahari
Friedman Sklar PLLC
amirghahari@fs-legal.com

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SOURCE SQN Capital Management