Black firm files unprecedented lawsuit against SBA for discrimination in its Small Business Investment Company ("SBIC")program. SBA has no licensees that are Black, and less than 5 which are Asian, Black, Native Indian, and Women combined. SBA and its currently-licensed SBIC's have only loaned and investd 5% of $20 Billion to minorities.
The Inspector Genral found bias and the U.S. Commision on Civil Rights found that SBA fails to monitor discrimination claims.
CONTACT C. Earl Peek (404) 404-378-6864
404) 285-6661-Cell
eptravbuff@aol.com
Black Venture Capital Firm Files Discrimination Complaint against SBA for Discrimination in SBIC Venture Capital Program. Inspector General Finds Bias and Separate Treatment in Recent Report.
ATLANTA, GA (PRWEB) August 21, 2003 -– Diamond Ventures, an Atlanta-based venture capital firm with a majority black management, today announced that it filed an unprecedented discrimination lawsuit against the Washington, D.C.- based Small Business Administration in the District Court of Washington, D.C. alleging bias in its selection process and prejudice in its application policies and procedures towards minority applicants.
Diamond Ventures, which has a management team with more than 70 years of combined experience in all aspects of business finance, lending, operations, venture capital, and business valuations, initially applied to the SBA for a venture capital license in January 2002. The management team has completed over 1,000 financings including 50 investments with a return of over 400% while other Small Business Investment Companies (SBICs") have averaged a 9.28% return for the last 15 years, per SBA reports.
In February 2003 Jeff Pierson, Associate Administrator for the SBAs Investment Division denied the application stating that the team lacked qualifications and ability to operate a Small Business Investment Company (SBIC) and SBA has significant concerns" with Diamonds investment philosophy of investing in Blacks, Asians, Women, Hispanics, and Native Indians.
In response to the SBAs assessment, C. Earl Peek, Managing Partner of Diamond said, Our management team demonstrated a solid track record in financings and private investments for over 20 consecutive years- its awful to see SBAs take this stance, while it hasnt licensed any black firms and less than 5 of the existing 450 SBICs are Black, Hispanic, Women, Native Indian, or Asians in total. SBAs comments are a pretext for discrimination.
Peek further said, We find it both inexplicable and disturbing that the SBA has approved firms with the same or similar management team profiles with investment return track records substantially less than Diamonds management team."
Public reports show:
Janice Mathis, Southeast Regional Director of Rainbow-Push cited a September 2000 SBA Inspector General Report on the organizations activities with women and minorities which stated that, None of the data for women or minority firms was reliable because it was incomplete and unverifiable."
Mathis noted, with the combined records of disparate treatment of minorities in access to capital and the associated lack of funds, its not a surprise that black businesses cannot compete and fail more often than their white counterparts". One of the key focuses of our fund is to invest in inner-city, underserved, and rural areas, where there is little hope for developmental capital," said Peek.
No matter what the outcome is regarding Diamond Ventures, SBA will need to address the serious disparity and availability of financing to minorities and women and in inner-city, underserved, and rural areas" Peek added.
Diamond Ventures is an Atlanta-based firm that specializes in investing and financing inner city businesses, real estate and commercial properties. Its partners collectively have more than 70 years experience in lending, investments, business advisory services, and venture capital.
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Photo Caption: C. Earl Peek and Lonnie A. Saboor with Former Senior Vice-President Roger Bower of RBC Tucker Federal after its first commitment to the venture fund.
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