Del Biaggio hasn't exactly copped to the charges. But he did agree not to make additional violations of securities laws — a usual step in reaching a settlement. The SEC will decide later how much he has to repay investors and cough up in fines. He also faces separate criminal charges.

What did he use the money for? The government's complaint says that Del Biaggio faked collateral documents to borrow $25 million in banks so he could buy a stake in the Nashville predators, a hockey team. He also raised a venture-capital fund, Sand Hill Capital Partners III, which the government says he used as a "checkbook" to pay off gambling debts and redecorate a palatial Bay Area home. Del Biaggio resigned form SHCP shortly before it filed for bankruptcy protection this summer.

What's curious about Del Biaggio's two crimes: He could have gotten away with them if he had just committed them simultaneously. If only he had told investors he needed to raise money to buy a sports team rather than invest in startups, he might be doing okay now. Jim Balsillie, a Canadian billionaire and founder of smartphone maker Research In Motion, wants to buy Del Biaggio's stake in the Predators. Unlike boom-and-bust startups, sports teams will always be worth something.

In April, Security Pacific Bank of Los Angeles made similar claims, suing Merriman and accusing Del Biaggio of tricking them into a $5 million loan. Sources told the Mercury News that Del Biaggio, who quit Sand Hill capital shortly after the scandal broke, now faces an SEC investigation. He's already declared bankruptcy, claiming he owes as much as $70 million and possesses a net worth of $50 million. It's a long, hard fall for one of San Francisco's more public financial figures. In the late 1990s, after financing inital public offerings for ShopNow.com and VerticalNet, Boots — living in a palatial estate in the Almaden Hills — was even considered a potential San Francisco mayoral candidate.