Clarity and Understanding for the Workplace

Updates

Brightline Solutions updates IA Act UnwrappedTM on a daily basis. These updates include new Releases, No-Action Letters, Enforcement Cases, Self-Examination Tools and Information related to all aspects of investment adviser compliance.  Subscribers are assured that they have access to the most current information available. The following is a selection of some of the more recent changes. Please login to access the information from the associated databases within IA Act UnwrappedTM.

Investors Remain Front of Mind at the SEC: Approach to Allocation of Resources, Oversight and Rulemaking; Implementation of Regulation Best Interest and Form CRS
Remarks by SEC Chairman Jay Clayton
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information

IA-5472 In the Matter of Barton W. Stuck
Order granting extension

IA-5471 In the Matter of Adam Matthew Root
In civil case, convicted of making material misrepresentations and omissions in order to induce prospective investors to invest in funds
Barred from association for 10 years

IA-5470
Regulatory Flexibility Agenda

Getting Back to Basics - Protecting, Serving, and Empowering Investors  
Remarks by SEC Commissioner Allison Herren Lee before the Investment Advisers Association Compliance Conference
   - Investment Adviser Advertising
   - Climate Risk Disclosure
   - Proxy Reform
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information

LR-24780 SEC v. Donald H. Hunter
SEC Charges Investment Adviser for Failing to Disclose Conflicts

IA-5468 In the Matter of Nicholas J. Genovese
In criminal case, convicted of securities fraud
Public hearing ordered

IA-5469 SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements
Form ADV & Form PF Filing Date Extended to June 30, 2020

IA-5467 In re: Pending Administrative Proceedings
The SEC orders that parties shall to the extent possible submit all filings to the Commission by sending them electronically at apfilings@sec.gov. The SEC will also continue to accept paper filings sent to the Office of the Secretary, although processing of documents received only via mail may be delayed.

LR-24773 SEC v. Brandon E. Copeland and E.B. & Copeland Capital, Inc.
Recidivist IA Charged with Fraud

IA-5456 In the Matter of E. Herbert Hafen
Fraud
Barred from association and barred from participating in any offerin gof a penny stock.

IA-5455 In the Matter of Daniel B. Vazquez, Sr.
Fraud
Public hearing ordered

LR-24769 SEC v. Stacey Beane, Justin Deckert and Travis Laska
Falsified Records in Connection with IA Ponzi Scheme Investigation

LR-24767 SEC v. Kinetic Investment Group, LLC, et al
SEC Halts Fraudulent Offering by Florida Investment Adviser

LR-24764
SEC v. E. Herbert Hafen
Final Judgment Against Former IA Charged with Defrauding Clients

IA-5466 In the Matter of Randall S. Goulding
Order Scheduling Briefing on Motion for Summary Disposition

IA-5465 In the Matter of Marcus Boggs
Stole from advisory clients; misappropriated clients' money
Barred from association and barred from participating in any offering of a penny stock

IA-5464 In the Matter of HSBC Securities (USA) Inc.
Misleading Disclosures Concerning IAR Compensation
Ordered to pay a civil monetary penalty of $750,000

IA-5462  In the Matter of Motty Mizrahi
Operated a fraudulent investment advisory scheme
Barred from association

IA-5461 In the Matter of Naya Ventures, LLC, Dayakar Puskoor, and Prabhakar Reddy
Respondents neglected to establish an Investor Advisory Committee; neglected to provide Audited Financial Statements
Ordered to pay civil monetary penalties

IA-5460 In the Matter of Bruce C. Worthington
Misappropriated investor funds
Public hearing ordered

IA-5458 In the Matter of Eric D. Lyons
Misused and misappropriated funds
Barred from association

IA-5457 In the Matter of Motty Mizrahi
Operated fraudulent investment advisory scheme
Public hearing ordered

IA-5463 Order under Section 206 of the Investment Advisers Act of 1940 Granting Exemptions from Speicified Provisions of the Investment Advisers Act and Certain Rules Thereunder
Order granting extention to file Form ADV and Form PF until April 30, 2020

IA-5459 In the Matter of John Thomas Capital Management Group LLC and George R. Jarkesy Jr.
Time to issue Decision is extended to 04/06/2020

IA-5454 Exemptions From Investment Adviser Registration for Advisers to Certain Rural Business Investment Companies
FINAL RULE
Release added to the IA Act UnwrappedTM Releases Database; amendments reflected under Regulatory Database Rules 203(l)-1 & 203(m)-1

IA-5453 In the Matter of Sica Wealth Management, LLC and Jeffrey C. Sica
IA-5452 In the Matter of Fortress Investment Management, LLC and William M. Malloy
Improper SEC registration and failure to disclose conflict of interest
The order also suspends Malloy from the industry for twelve months. Sica, Malloy, and their related entities have agreed to pay approximately $564,000 to resolve the SEC's charges, including disgorgement of the advisory fees they charged during the time of their violations, which will be used to fund a distribution to harmed investors.

IA-5451 In the Matter of Wells Fargo Clearing Services, LLC and Wells Fargo Advisers Financial Network, LLC
Made unsuitable recommendations to clients; inadequately trained compliance

IA-5450 In the Matter of Steven E. Fishman
Annual audited financial statements prepared in accordance with GAAP were not distributed to some of the investors in its funds for fiscal years 2014 through 2017 Custody Rule 206(4)-2 violations
Added to the IA Act UnwrappedTM Releases Database and to the Significant Cases Tab under Regulatory Database Rule 206(4)-2

LR-24747 SEC v. Dionne Van Zyl
SEC Charges Georgia Businessman with Affinity Fraud Focused on Christian Investors

IA-5449 In the Matter of Matthew R. Rosse and SJL Capital LLC
Order granting request for Protective Order limiting disclosure of the Form D-A

IA-5448 In the Matter of Lone Star Value Management, LLC and Jeffrey Eberwein
Engaged in principal transactions without disclosure; compliance program rule violations
Ordered to pay civil monetary penalties

IA-5447 In the Matter of Marcus Boggs
Stole over $1.7 million from investment advisory clients; misappropriated clients’ money by selling securities in their advisory accounts and then transferring the proceeds to his personal credit card account; made illegal transfers from clients’ accounts to pay for personal credit card purchases
Public hearing ordered

LR-24744 SEC v. Navellier & Associates, Inc., and Louis Navellier
Partial Summary Judgment Against IA and Principal for False and Misleading Marketing of Investment Strategies

IA-5446 Delegation of Authority to the General Counsel of the Commission
Final Rule

LR-24739 SEC v. Richard G. Cody, et al.
Judgment Against Former Massachusetts-Based IA Charged with Defrauding Retirees

IA-5444 In the Matter of BPU Investment Management, Inc.
Breaches of fiduciary duty in connection with its mutual fund share class selection practices and its receipt of fees; disclosure failures; best execution failures; compliance deficiencies; did not self-report under the SCSD Initiative
Ordered to pay disgorgement, prejudgment interest, and a civil penalty, totaling $927,107

LR-24738 SEC v. Criterion Wealth Management Insurance Services, Inc., et al
SEC Charges IAs with Failure to Disclose Financial Conflicts of Interest

LR-24736 SEC v. The Nutmeg Group LLC, et al
SEC Obtains Judgment Against Former IA CCO

IA-5443 In the Matter of Joseph A. Meyer, Jr.
In connection with the sale of limited partnership interests, falsely stated to investors that funds were guaranteed against losses, misappropriated fund assets, sent out false account statements indicating that investors funds were fully invested and earning positive returns without disclosing that such returns were backed in significant part by unsecured promissory notes
Public hearing ordered

IA-5442 In the Matter of Jay Costa Kelter
Engaged in a scheme to defraud investment advisory clients - made material misrepresentations to clients in connection with the purchase, sale, and offer of securities, including misrepresentations concerning the use of client funds; misappropriated over $1.4 million from a client by forging the client’s name on withdrawal requests or misprepresenting the nature of the withdrawals to the client
Barred from association

IA-5441 In the Matter of Cannell Capital, LLC
CCL failed to establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of its business, to prevent the misuse of material nonpublic information; failed to follow its written policies and procedures by not maintaining a list of securities that members, officers, and employees (“covered persons”) and their family household members were prohibited from trading after the firm came into possession of potential material nonpublic information; CCL’s written policies and procedures related to the handling of material nonpublic information were not reasonably designed to prevent misuse of material nonpublic information because they did not address any business-specific risks and lacked any guidance regarding when trading in securities should be restricted.
Ordered to pay a $150,000 civil monetary penalty

Myths and Realities: Modernizing the Proxy Rules
Speech by SEC Commissioner Elad L. Roisman
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information and to the Plain English Description Tab under Regulatory Database Rule 206(4)-6

IA-5440 In the Matter of Edward E. Matthes
Judgment entered by consent against Matthes for defrauding mostly elderly retail brokerage and investment advisory clients; Ponzi-like scheme
Barred from association and barred from participating in any offering of a penny stock

IA-5439 In the Matter of Barton W. Stuck
In Connecticut case, convicted of wire fraud, money laundering and making false statements to the SEC
Public hearing ordered

IA-5438 In the Matter of Patrick L. O'Connor
Order regarding status reports

IA-5437 In the Matter of Jaswant Gill
Order to Show Cause

IA-5436 In the Matter of Catalyst Capital Advisors, LLC and Jerry Szilagyi
Misled investors about the management of risk in a mutual fund
President and CEO, Szilagyi, agreed to pay a combined $10.5 million to settle the charges.  The SEC also filed a complaint against Senior Portfolio Manager, Edward Walczak, for fraudulently misrepresenting how he would manage risk for the fund.

Cybersecurity and Resiliency Observations
OCIE examination observations r
elated to cybersecurity and operational resiliency practices taken by market participants
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information

IA-5366A In the Matter of Leonardo Cornide and Jorge Falcon
Amended Order - failure to disclose conflicts of interest

IA-5435 In the Matter of John Thomas Capital Management Group LLC and George R. Jarkesy Jr.
Order extending time to issue decision

IA-5434 In the Matter of Inter-American Development Bank
Order granting exemption under Advisers Act Sec. 202(a)(11)(H)

IA-5433 In the Matter of Mark J. Moskowitz
Ordered to file an answer to the allegations made in the OIP and also ordered to make the filing directed by the Show Cause Order

IA-5432 In the Matter of Lester W. Burroughs
In criminal case, pled guilty to misappropriating investor funds
Barred from association and barred from participating in any offering of a penny stock

LR-24714 SEC v. Michael B. Rothenberg
Court orders technology fund adviser to pay over $31mil - misappropriated investor funds

Frequently Asked Questions on Regulation Best Interest
Topics include: Recommendation; Disclosure Obligation; Care Obligation; and Conflict of Interest Obligation
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information, and linked to the term "Regulation Best Interest" in the Glossary & Definitions Database

IA-5431 In the Matter of Michael Mindlin
Insider trading
For 3 years, barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; ordered to pay disgorgement of $60,482, representing the performance-based compensation he received as a result of the 2014 purchase of HCA stock, prejudgment interest of $13,122, and a civil money penalty of $60,482

IA-5430 In the Matter of Patrick L. O'Connor
Order Regarding Service

IA-5429
In the Matter of J.P. Morgan Securities LLC
Disadvantaged certain retirement plan and charitable organization brokerage customers who maintained accounts at JPMS by failing to ascertain that they were eligible for a less expensive share class, and recommending and selling them more expensive share classes in certain open-end registered investment companies (“mutual funds”) when less expensive share classes were available
Censured and ordered to pay disgorgement of $251,083, prejudgment interest of $71,355, and civil penalties of $1,500,000

IA-5428 Adjustments to Civil Monetary Penalty Amounts
Notice of Annual Inflation Adjustment of Civil Monetary Penalties

IA-5427 In the Matter of Bradley C. Mascho
Fraud; Ponzi-like scheme
Barred from association and barred from participating in any offering of a penny stock

LR-24710 SEC v. ARO Equity, LCC et al
SEC Charges Private Investment Firm with Fraudulently Misleading Investors

CIE 2020 National Examination Priorities
Publication has been added to the IA Act UnwrappedTM Examination Tools Database/2020 Information

LR-24709 SEC v. Kelter
Fraud judgment against former IA

IA-5425 In the Matter of Randall S. Goulding
Extension Order

IA-5424 In the Matter of Stephen Condon Peters
In criminal proceeding, convicted of defrauding investors and obtained money and property by means of materially false and misleading statements in connection with the fraudulent sale of notes to investment advisory clients
Public hearing ordered

IA-5423 In the Matter of Christopher S. Laws
In civil case found to have fraudulently induced federal employees to rollover significant funds from their federal retirement accounts
Barred from association and barred from participating in any offering of a penny stock

IA-5422 Amendments to Rule 2-01, Qualification of Accountants
Proposing Release has been added to the IA Act UnwrappedTM Releases Database

IA-5421 In the Matter of Bill Tsai
Insider trading
Barred from association and barred from participating in any offering of a penny stock

IA-5420 Inter-American Development Bank; Notice of Application
Notice of application for an exemption under Advisers Act. Sec. 202(a)(11)(H)

IA-5419 In the Matter of Karen Bruton and Hope Advisors, LLC
Initial Decision has become final

IA-5418 In the Matter of Tim Leissner
Massive corruption scheme in coordination with other Goldman Sachs senior executives - authorized and paid bribes and kickbacks to government officials in Malaysia and the Emirate of Abu Dhabi in order to secure lucrative business for Goldman Sachs.
Barred from association; prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; and barred from participating in any offering of a penny stock

IA-5417 In the Matter of Randall S. Goulding
In civil action, found to have commingled investor funds with his personal assets, implemented flawed internal systems and methods for valuing and reporting the value of assets under management, and transferred millions of dollars out of client accounts to himself and companies controlled by family members
Public hearing ordered

IA-5416 In the Matter of Kornitzer Capital Management, Inc., and John C. Kornitzer
Repeated failures to follow client instructions to reduce high concentrations in securities of a single company held by four collective investment trusts (“CITs”).
Ordered to pay disgorgement, prejudgment interest, and a civil money penalty

IA-5415 In the Matter of Ronald J. Roach
Deceived investors in securities offered by certain solar energy companies
Barred from association and barred from participating in any offering of a penny stock

IA-5414
In the Matter of International Investment Group, LLC
Grossly overstated value of defaulted loans in the fund’s portfolio to conceal losses in its flagship hedge fund
IIG’s investment adviser registration is revoked

LR-24695 SEC v. Keith Springer and Springer Investment Management, Inc.
SEC Charges Recidivist Investment Adviser with Defrauding Retirees

Robert Van Grover Esq., Seward & Kissel LLP
No-action letter - Rule 206(4)-2
Added to the IA Act UnwrappedTM Regulatory Database Rule 206(4)-2: Custody No-Action Letter Tab

LR-24681 SEC v. Lester Burroughs
Charged wtih misappropriating $560,000 from his advisory clients by selling fictitious financial products and using the proceeds to pay other advisory clients, as well as for personal use

IA-5413 Use of Derivatives by Registered Investment Companies and Business Development Companies; Required Due Diligence by Broker-Dealers and Registered Investment Advisers Regarding Retail Customers’ Transactions in Certain Leveraged/Inverse Investment Vehicles
Proposing Release - Added to the  IA Act UnwrappedTM Releases Database

Frequently Asked Questions on Form CRS
Added to the IA Act UnwrappedTM Regulatory Database, Rule 204-5: Delivery of Form CRS

IA-5415 In the Matter of Ronald J. Roach
Scheme to defraud
Barred from association and barred from participating in any offering of a penny stock

LR-24677 SEC v. The Nutmeg Group LLC and Randall Goulding
SEC Wins Trial and $1.8 Million Judgment Against IA for Defrauding Clients

IA-5414 In the Matter of International Investment Group, LLC
Defrauded investment advisory clinets - concealed losses in the portfolio of its flagship hedge fund by overstating the value of certain defaulted trade finance loans and by replacing defaulted loans with fake loans
IA registration revoked

IA-5412 In the Matter of Channing Capital Management, LLC
Failure to adequately implement written policies and procedures governing the allocation of trading commission costs associated with aggregated (or block) securities trades on behalf of its institutional investor and pension fund clients
Ordered to pay a civil moetary penalty of $50,000

IA-5411 In the Matter of Lawrence Allen Deshetler
OPINION - Respondent was convicted of mail fraud
Barred from association

LR-24670 SEC v. Ruless Pierre a/k/a Rules Pierre
Charges for Running a Community-Based Ponzi Scheme Targeting the Haitian Community

IA-5410 In the Matter of William Harper Minor, Jr.
Order to Show Cause why he should not be deemed to be in default

LR-24664 SEC v. Gregory M. Bercowy
Court Sentences FL Resident to Prison and Orders Payment of over $3 Million in Market Manipulation Scheme

IA-5409 In the Matter of Daniel Sholom Frishberg
Renewed Order Requesting Additional Written Submission

IA-5408 In the Matter of Morgan Stanley Smith Barney LLC
Charges in Connection with Mutual Fund Sales to Retirement and Charitable Accounts

IA-5406 In the Matter of James T. Booth
In criminal case, convicted of misappropriating investor funds
Barred from association and barred from participating in any offering of a penny stock

IA-5405 In the Matter of Cameron G. High
In criminal case, convicted of defrauding invetors
Barred from association and barred from participating in any offering of a penny stock

IA-5404 In the Matter of Thomas D. Conrad, Jr.
In civil case, convicted of failing to disclose disciplinary history to potential investors and allowing disbursements and redemptions from the hedge funds to certain favored investors while blocking others.
Public hearing ordered

Enforcement Division Annual Report - FY19
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

LR-24660 SEC v. Bolton Securities Corporation d/b/a Bolton Global Asset Management
SEC Charges IA for Failing to Disclose Conflicts

IA-5407 Investment Adviser Advertisements; Compensation for Solicitations
Proposing Release

Securities Industry and Financial Markets Association
Extention of Temporary No-Action Letter - Advisers Act Sec. 202(a)(11)

FAQs Regarding Disclosure of Certain Financial Conflicts Related to Investment Adviser Compensation
Division of Investment Management

Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

Joint Statement on Activities Involving Digital Assets
Statement issued by the Leaders of CFTC, FinCEN, and SEC to remind persons engaged in activities involving digital assets of (AML/CFT) obligations
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

LR-24643 SEC v. Cetera Advisors, LLC and Cetera Advisor Networks LLC
IA & BD Charged with Defrauding Advisory Clients

IA-5403 In the Matter of Albert K. Hu
Extension Order

IA-5402 In the Matter of Saving2Retire, LLC, and Marian P. Young
Order Granting Petition for Review and Scheduling Briefs

LR-24640 SEC v. Thomas Conrad, Jr. et al.
SEC Obtains Sanctions Against IA; fraudulent redemption practices and their failure to disclose disciplinary history

IA-5401 In the Matter of Michael Siva
LR-24638 SEC v. Daniel Rivas, et al.
Traders in serial insider trading scheme agree to settle SEC charges; In criminal case, pled guilty to insider trading
Barred from association and barred from participating in any offering of a penny stock

IA-5400 In the Matter of Mark Megalli
Notice that Initial Decision has become final

IA-5399 In the Matter of Daniel Sholom Frishberg
Order requesting additional written submission clarifying the relief sought in his application

LR-24633 SEC v. Westport Capital Markets, LLC and Christopher E. McClure
Partial Summary Judgment Against IA and Principal On Undisclosed Compensation Claims

LR-24632 SEC v. Bluepoint Investment Counsel, et al
Fraud Charges Related to Wisconsin Investment Fraud

LR-24829 SEC v. James T. Booth
SEC Charges Connecticut Man with Ponzi Scheme Defrauding Retail Investors

LR-24828
SEC v. Marcus Beam
SEC Charges IIIinois IA for Stealing His Clients' Money

LR-24617 SEC v. William M. Apostelos, et al.
Final Judgment Against Ohio Businessman in Multimillion-Dollar Offering Fraud

LR-24626
SEC  v. Yellowstone Partners, LLC, David H. Hansen, and Cameron G. High
SEC Charges Former Idaho Falls IA and Its Former Principals for Fraudulently Overbilling Clients

IA-5369
In the Matter of Hefren-Tillotson, Inc.
SEC Orders Advisory Firm to Reimburse Clients for Taking Undisclosed Compensation; failure to provide best execution
Censured, ordered to pay disgorgement, prejudgment interest and an $80,000 civil penalty

IA-5368 In the Matter of Joseph B. Bronson
LR-24615 SEC v. Strong Investment Management, et al
Final Judgments and Bars Against Former IA and Senior Officers for Fraudulent "Cherry-Picking" Scheme

IA-5367 In the Matter of Nicholas Lattanzio
In criminal case, found guilty of participating in fraudulent scheme to mislead investors and clients as to their investment in the Fund
Barred from association

IA-5366 In the Matter of Leonardo Cornide and Jorge Falcon
Two South Florida IAs to Repay Millions of Dollars for Failing to Disclose Conflicts of Interest

Unlawful Proxy Voting of Client Securities:
IA-5375 In the Matter of Three Bridge Wealth Advisors, LLC
IA-5374 In the Matter of Amadeus Wealth Advisors, LLC
Added to the IA Act UnwrappedTM Releases Database and to the Risks/Significant Cases Tab under Regulatory Database Rule 206(4)-6

IA-5371 In the Matter of Cetera Investment Advisers LLC
Violated Cash Solicitation Rule
Censured and ordered to pay a civil monetary penalty of $185,000
Added to the IA Act UnwrappedTM Releases Database and to Risks/Significant Cases under Regulatory Database Rule 206(4)-2 Cash Payments for Client Solicitations

Oversight of the SEC: Wall Street’s Cop on the Beat
Testimony Before the U.S. House of Representatives Committee on Financial Services
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

SEC Orders Self-Reporting Advisory Firms to Pay Nearly $10 Million to Investors:
IA-5380 Comprehensive Capital Management Inc.
IA-5381 Henley & Company Wealth Management LLC
IA-5382 IC Advisory Services Inc.
IA-5383 Independent Financial Group LLC
IA-5384 IPG Investment Advisors LLC
IA-5385 Saxony Capital Management LLC
IA-5386 Wedbush Securities Inc.

IA-5273 In the Matter of ECP Manager LP
Charged excessive management fees following the write-off of a private equity fund investment
Ordered to pay disgorgement and prejudgment interest and a civil monetary penalty of $75,000

IA-5372 In the Matter of Gonzalo Ortiz
Solicited an investor while unregistered - misappropriated funds for personal use
Barred from association

LR-24633 SEC v. Westport Capital Markets, LLC and Christopher E. McClure
Partial Summary Judgment Against IA and Principal On Undisclosed Compensation Claims

SEC Orders Self-Reporting Advisory Firms to Pay Nearly $10 Million to Investors:
IA-5388 Bill Few Associates Inc.
IA-5389 Cargile Investment Management Inc.
IA-5390 Equity Services Inc.
IA-5392 Essex Financial Services Inc.
IA-5391 Folger Nolan Fleming Douglas Capital Management Inc.
IA-5393 Hilltop Securities Inc. and Hilltop Securities Independent Network Inc.
IA-5394 Investment Partners Ltd.
IA-5395 Michigan Advisors Inc.

IA-5396 In the Matter of Bruce J. Fixelle
Misappropriated investor funds for personal purposes and distributed false account statements
Barred from association

IA-5379 In the Matter of BGC Partners, Inc.   
Waiver from being an ineligible issuer

IA-5378 In the Matter of Bank of Montreal
Waiver from being an ineligible issuer

IA-5377 In the Matter of BMO Harris Financial Advisors, Inc., and BMO Asset Management Corp.
Two BMO Advisory Firms Pay Over $37 Million to Harmed Clients for Failing to Disclose Conflicts of Interest

IA-5370 In the Matter of Mahesh Agarwal
Took short positions in U.S. Treasury Bonds that exceeded his trading mandate resulting in large losses; mismarked certain illiquid credit derivatives in a proprietary book he managed called the “Exotics Book,” and booked more than 100 UST trades at off-market prices between the Exotics Book and his primary trading book, the “ETF Book.”
For 12 months: suspended from association; prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; and suspended from participating in any offering of a penny stock; ordered to pay a civil monetary penalty of $80,000

IA-5365 In the Matter of Albert K. Hu
In criminal case, convicted of fraud
Public hearing ordered

IA-5364 In the Matter of Scott G. Huish
Made material misstatements to investors and prospective investors in a pooled investment vehicle he managed
Barred from association and barred from participating in any offering of a penny stock; ordered to pay a civil monetary penalty of $160,000

IA-5398 In the Matter of Woojae "Steve" Jung
Made trades based on material non-public information; insider trading
Barred from association and barred from participating in any offering of a penny stock

IA-5397 In the Matter of Founders Financial Securities, LLC
Invested clients in more expensive mutual fund share classes, which provided the firm with financial benefits, without disclosing this conflict to clients.
Founders will pay disgorgement of $1,246,133, prejudgment interest of $229,332, and a civil penalty of $140,000. Founders has agreed to distribute $1,475,465 to harmed investors.

IA-5387 In the Matter of Mid Atlantic Financial Management Inc.
SEC Orders Firm That Did Not Self-Report to Pay $300,000 Penalty for Disclosure Failures

IA-5363 In the Matter of Strategic Planning Group, Inc., David A. Rourke, and Jarrod A. Sherman
SPG’s failure adequately to disclose conflicts of interest to its clients; Respondents breached fiduciary duty
Censured; SPG shall pay a civil money penalty of $200,000, Rourke shall pay a civil money penalty of $75,000, and Sherman shall pay a civil money penalty of $75,000

IA-5362 In the Matter of Anthony Vassallo
In California case, convicted of running a Ponzi scheme
Public hearing ordered

IA-5361 In the Matter of HCR Wealth Advisors
Failed to reasonably supervise Jeremy Joseph Drake, a former IA Rep of HCR's and to implement reasonable policies and procedures in response to warnings about Drake’s conduct and did not reasonably investigate when clients complained about Drake’s handling of their accounts.
Censured and ordered to pay a civil monetary penalty of $220,000

IA-5360 Order cancelling registrations of certain investment advisers

IA-5359 In the Matter of Sonya D. Camarco
In Colorado case, convicted of stealing from elderly clients to fund an extravagantly lavish lifestyle
Public hearing ordered

IA-5358 In the Matter of Marcos Tamayo and Bored at Work Retirement Services, LLC
Defrauded advisory clients and failed to register his investment advisory business
Censured; agreed to certain undertakings, including providing advisory clients with notice of the SEC's order; agreed to pay disgorgement, prejudgment interest, and a civil penalty of $50,000, and consented to a twelve-month suspension. The SEC created a fair fund to distribute payments to clients.

IA-5357 In the Matter of David R. Gibson
In criminal proceeding - convicted of securities fraud; Respondent made, and/or substantially participated in making, material false or misleading disclosures concerning loans 90 days or more past due; negligently engaged in conduct that misled investors concerning the extent of past due, matured and extended loans in Wilmington’s commercial loan portfolio.
Gibson is suspended from appearing or practicing before the Commission as an accountant; and barred from association

IA-5356 In the Matter of Sigma Planning Corp.
Breaches of fiduciary duty and failures to disclose by registered investment adviser Sigma in connection with its mutual fund share class selection practices and the fees it received, as well as receipt of revenue-sharing payments and its failure to register as a broker-dealer; best execution violations; compliance deficiencies
Orderd to pay $2.5 million

IA-5355 In the Matter of Jay Daniel Seinfeld
Re SEC v. Seinfeld, made material misstatements and omitted to state material facts  - used fake charity to defraud terminally ill
Suspended from appearing or practicing before the Commission as an attorney for 3 years

IA-5351 In the Matter of Tyler T. Tysdal, et al
IA-5350 In the Matter of Michael A. DeJager
Multiple schemes to defraud
All respondents consented to the entry of cease-and-desist orders. Tysdal also consented to a 3-year collateral associational bar and an investment company bar, and IOFM, TCCM, and TCCG consented to censures. The orders require Tysdal to pay disgorgement and prejudgment interest totaling $843,099 and a civil penalty of $320,000, require Carter to pay a civil penalty of $160,000, and require Haugland and DeJager to each pay a civil penalty of $15,000.

IA-5349 In the Matter of Stifel, Nicolaus & Company, Incorporated
Failure to submit to the complete and accurate data in response to Commission staff electronic blue sheets (“EBS”) requests, resulting in the reporting of EBS that was incomplete or deficient.
Censured and ordered to pay a civil monetary penalty of $2.7 million

IA-5348 In the Matter of BMO Capital Markets Corp.
Failure to submit to the SEC true and complete data in response to Commission staff electronic blue sheets (“EBS”) requests, resulting in the reporting of EBS that was incomplete or deficient.
Censured and ordered to pay a civil money penalty in the amount of $1,950,000.

IA-5347 In the Matter of Prudential Financial, Inc.
Order granting a Waiver from being an Ineligible Issuer

IA-5346 In the Matter of AST Investment Services, Inc. and PGIM Investments LLC
These proceedings arise out of two different issues that financially harmed certain funds after they were reorganized and converted from being taxed as regulated investment companies (RICs) to partnerships for federal income tax purposes so that Respondents’ parent company and its affiliates could take advantage of certain tax benefits; failure to disclose conflicts of interest
Censured and ordered to pay disgorgement of $27,632,560.00, and a civil money penalty of $5 million

IA-5344 In the Matter of ED Capital Management and Elliot Daniloff
Custody rule violations, made untrue statements in ED Capital's Forms ADV and failed to conduct annual reviews of its compliance policies and procedures
Censured; ED Capital ordered to pay a civil monetary penalty  of $75,000 and Daniloff to pay a civil monetary penalty of $25,000

IA-5343 In the Matter of Mitchell T. Yanow
Scheme to defraud - Yanow convinced A.W. to provide him with signed blank checks drawn on A.W.’s Stifel account, falsely telling A.W. that he would use the checks to pay A.W.’s expenses. Instead, Yanow used the checks to pay his own and his family’s expenses.
Barred from association and barred from participating in any offering of a penny stock

IA-5342 In the Matter of Daniel T. Levine
In Colorado case, sales rep and IA rep licenses permanently revoked; Levine had offered to his an investment scheme involving his brother related to an over-the-counter sale of discounted bitcoin; failed to disclose his brother’s criminal history to his clients; failed to perform sufficient due diligence on the ownership of the bitcoin; failed to develop and implement a secure procedure for the transfer of funds and bitcoin, such that his brother was able to abscond with approximately $1.5 million in funds; failed to adequately disclose to investors the high risk of transacting with an unknown third party seller without a secure procedure for the transfer of funds or bitcoin; and failed to provide written notice to his registered BD and IA employer that he was engaged in a business activity outside of the scope of his employment for which he was or expected to be compensated.
Barred from association and barred from participating in any offering of a penny stock

IA-5354 In the Matter of Morgan Stanley Smith Barney, LLC
Charged for Recommending Unsuitable Municipal Bond Transactions
Cease-and-desist order, censured, and ordered to pay a $225,000 civil penalty

IA-5353 In the Matter of Raymond James Financial, Inc.  
Order granting a Waiver from being an Ineligible Issuer

IA-5352 In the Matter of Raymond James & Associates, Inc., et al
Failed to conduct promised suitability reviews for certain advisory accounts, did not adopt policies and procedures reasonably designed to prevent violations concerning the suitability of fee-based advisory accounts, and overvalued certain assets; failed to have a reasonable basis for recommending certain transactions; and failed to disclose conflict of interest
Censured and ordered to pay disgorgement, prejudgment interest and a civil money penalty totaling $15,171,113.81

IA-5345 In the Matter of Garrison Investment Group, LP and Garrison Capital Advisers, LLC
SEC Charges NY IAs with Entering Into Prohibited Transactions; Custody Rule Violations
Ordered to pay a civil monetary penalty of $250,000

LR-24595 SEC v. Dean Patrick McDermott, McDermott Investment Advisors, LLC, et al
Defrauded Advisory Clients by Charging Improper Transaction Costs

IA-5341 In the Matter of William M. Apostelos
In criminal case, pled guilty to theft and embezzlement of pension employee funds
Public  hearing ordered

IA-5340 In the Matter of Carol Ann Pedersen
Misused investor funds
Barred from association

LR-24589 SEC v. Strategic Capital Management, LLC and Michael J. Breton
Final Judgment in cherry-picking scheme 

Form CRS Relationship Summary - Amendments to Form ADV
A Small Entity Compliance Guide

Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information and to the Plain English Description Tab under Regulatory Database Rule 204-5

LR-24586 SEC v. E. Herbert Hafen
Fraud

Investment Adviser Principal and Agency Cross Trading Compliance Issues
OCIE Risk Alert added to the IA Act UnwrappedTM Examination Tools Database and to Regulatory Database Rule 206(3)-2 Risks Tab

IA-5339 In the Matter of Eric Larson Sampson
Securities fraud
Barred from association and barred from participating in any offering of a penny stock

IA-5338
In the Matter of Mitchell J. Friedman
Failure to disclose to Sharpe 4 Partners, L.P., a private fund he advised, material conflicts of interest
Barred from prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter, for a period of one year; ordered to pay a civil moetary penalty of $94,713

IA-5337 In the Matter of Karen McKinley
In criminal case, convicted of theft
Public hearing ordered

IA-5336 In the Matter of  Lefavi Wealth Management, Inc.
Breaches of fiduciary duty and disclosure failures in connection with its recommendation and investment of client assets in non-traded real estate investment trusts, business development companies, and private placements; violated duty to seek best execution
Ordered to pay disgorgement, prejudgment interest and a civil moentary penalty of $150,000
Added to the IA Act UnwrappedTM Releases Database and linked to the term "best execution" in the Glossary & Definitions Database

IA-5335
In the Matter of Thomas C. Muldoon
Fraudulent scheme carried out by Muldoon, a former Wells Fargo Clearing Services, LLC trader, to evade the retail order period restrictions in municipal bond offerings.
For a period of two years: barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; and barred from participating in any offering of a penny stock
Ordered to pay a civil monetary penalty of $25,000

IA-5334 In the Matter of Charles Myrick Winstead
Order to Show Cause

LR-24581 SEC  v. Cetera Advisors, LLC
SEC Charges IA with Defrauding Its Advisory Clients

LR-24580 SEC v. Cambridge Capital Group Advisors, LLC, et al
SEC Charges Adviser Firm and Its Principals with Defrauding Retired NFL Players

IA-5333 In the Matter of EMS Capital LP
Reg SHO violations - sold short and mismarked sell orders as long
Rule 204-2 violations - failed to keep accurate order memoranda and copies of all written communications sent by IA relating to the placing or execution of any order to sell any security
Ordered to pay disgorgement, prejudgment interest and a civil monetary penalty of $60,000

IA-5332 In the Matter of Stephen C. Browere
Fraud - misrepresented and misused investor funds
Barred from association

IA-5331 In the Matter of RSM US LLP (f/k/a McGladrey LLP)
Violated Auditor Independence Rules
RSM US represented that it was “independent” in audit reports issued on the clients’ financial statements, which were included or incorporated by reference in public filings with the Commission or provided to private fund investors for the purpose of complying with the Custody Rule 306(4)-2.

IA-5330 In the Matter of Laurel Wealth Advisors, Inc.
Cherry picking and compliance failures
Censure, payment of a $100,000 penalty, and a voluntary undertaking to provide a copy of the order to each former client.

IA-5329 In the Matter of Joseph C. Buchanan
Buchanan is barred from association and ordered to pay disgorgement and prejudgment interest

LR-24574 SEC v. Motty Misrahi et al
Indictment issued against IA named in SEC action

IA-5328 Regulatory Flexibility Agenda

IA-5327 In the Matter of Patrick L. O’Connor
In March, executed a plea agreement pursuant to which he agreed to plead guilty to one count of wire fraud and one count of money laundering
Public hearing ordered

IA-5326 In the Matter of Yehuda Belsky, AKA "Jay Bell"
In criminal case, pled guilty to securities fraud
Barred from association

IA-5325 Commission Guidance Regarding Proxy Voting Responsibilities of Investment Advisers
Added to the IA Act UnwrappedTM Releases Database and to Interpretive Releases under Regulatory Database Rule 206(4)-6

34-86721 Commission Interpretation and Guidance Regarding the Applicability of the Proxy Rules to Proxy Voting Advice
Exchange Act Release linked to IA Act UnwrappedTM Regulatory Database Rule 206(4)-6 Proxy Voting Description Tab

SEC Clarifies IA’s Proxy Voting Responsibilities and Application of Proxy Rules to Voting Advice 
Information added to the IA Act UnwrappedTM Regulatory Database Rule 206(4)-2 Plain English Description Tab

IA-5324 In the Matter of Financial Sherpa, Inc. and James L. Beyersdorf
Cherry-picking
Barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; ordered to pay a civil monetary penalty

IA-5323 In the Matter of Thomas Gillons
In a civil injunctive action, inter alia, enjoined from trading in the commodities and futures industry and registration (or seeking exemption from registration) with the CFTC
Barred from association and barred from participating in any offering of a penny stock

Request for amendment to Form ADV, Part 1A, Item 5 (Information About Your Advisory Services), Section E (Compensation Arrangements) by requiring investment advisers to disclose the schedules of fees levied for their services and other compensation in a standardized format
Request submitted by Dr. Benjamin H. Harris Executive Director, Kellogg Public-Private Interface at Northwestern University
Public Petition for Rulemaking linked to IA Act UnwrappedTM Regulatory Database Rule 204-1 Plain English Description Tab

IA-5322 In the Matter of Christopher D. Dougherty
In civil case, convicted of operating a Ponzi scheme
Barred from association

LR-24563 SEC v. Craig Rumbaugh, Rumbaugh Financial Inc., and Desert Strategic Equity, LLC
Defrauded clients by deceiving them about the terms of their investments and concealing intent to profit personally from those investments

IA-5321 In the Matter of Chris Kubiak
In criminal case, pled guilty to fraud
Barred from association and barred from participating in any offering of a penny stock

IA-5320 In the Matter of Michael J. Frew
In criminal case, pled guilty to fraud
Barred from association and barred from participating in any offering of a penny stock

IA-5319 In the Matter of MVP Manager LLC
Failure to disclose conflicts of interest relating to MVP personnel’s receipt of brokerage commissions from counterparties to certain transactions with MVP’s advisory-client funds without adequate disclosure to those MVP clients or to investors in the client funds.
MVP agreed to settle by consenting to a cease-and-desist order and censure, disgorgement and prejudgment interest of approximately $170,000, and a civil monetary penalty of $80,000.

IA-5318 In the Matter of Jeremy Joseph Drake
In civil case, convicted of deceiving clients about the advisory fees they were paying causing them to pay over $1.2 million more in advisory fees than Drake led them to believe they were paying, of which he received approximately $900,000 as incentive-based compensation.
Public hearing ordered

IA-5317 Notice of Intention to Cancel Registrations of Certain Investment Advisers
Each registrant listed in the attached Appendix has (a) not filed a Form ADV amendment with the SEC as required and appears to be no longer in business as an IA and/or (b) indicated on Form ADV that it is no longer eligible to remain registered with the SEC as an IA but has not filed Form ADV-W to withdraw its registration. The SEC believes that reasonable grounds exist for a finding that these registrants are no longer in existence, are not engaged in business as IAs, or are prohibited from registering as IAs, and that their registrations should be cancelled.

IA-5316 In the Matter of Sean Kelly
In civil case, convicted of stealing money from investors by promising that he would invest the funds in a variety of investment vehicles, including securities; rather than investing the money that he raised from investors, he stole it and used it for personal expenses
Public hearing ordered

IA-5315 In the Matter of JDC-JSC LP
Order granting registration

IA-5313 In the Matter of Kendall J. Groom, CPA
Misappropriated investment advisory client funds
Barred from association; prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; and barred from participating in any offering of a penny stock for a period of 5 years. Prdered to pay disgorgement, prejudgment interest and a civil moetary penalty of $185,000.

IA-5314 In the Matter of The Robare Group, Ltd., Mark L. Robare, and Jack L. Jones, Jr.
Extension Order

LR-24550 SEC v. Commonwealth Equity Services, LLC
IA Charged with Failing to Disclose Conflicts Arising from Receiving Revenue Sharing on Client Investments

IA-5312 In the Matter of Jonathan Brosk
Unauthorized securities allocations to the accounts of his advisory clients
Barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter for a period of 3 years; ordered to pay a civil monetary penalty of $25,000.

IA-5311 In the Matter of Christopher Plaford
LR-24548 SEC v. Christopher Plaford
In criminal case, pled guilty to participating in (a) a scheme to inflate falsely the value of securities held by a hedge fund he advised, the effect of which was to overstate the fund’s apparent liquidity and net asset value, resulting in higher payments from investors; (b) a scheme to convert to his own use, and purchase and sell securities based on, material nonpublic information from the Centers for Medicare and Medicaid Services (“CMS”) concerning, among other things, CMS’ internal deliberations and upcoming actions regarding certain insurance reimbursement rates; and (c) a scheme to convert to his own use, and purchase and sell securities based on, material nonpublic information from the FDA concerning the FDA’s deliberations regarding certain generic drug approvals.
Barred from association

IA-5310 In the Matter of Timothy M. Rooney, Sr.
Insider trading in the securities of Vera Bradley, Inc.
Barred from association, prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; and barred from participating in any offering of a penny stock; ordered to pay disgorgement, prejudgment interest and a civil monetary penalty of $715,417.

IA-5309 In the Matter of John Sherman Jumper
Extension Order

IA-5308 In the Matter of William Harper Minor, Jr.
In criminal case, convicted of misappropriating employee pension plan funds for his own use; currently incarcerated
Public hearing ordered

IA-5307 In the Matter of N. Gary Price
Failed to disclose conflicts of interest
Barred from association for 1 year, ordered to pay disgorgement and prejudgment interest and a civil monetary penalty of $75,000

IA-5306 In the Matter of Foundations Asset Management, LLC, Michael W. Shamburger, and Rob E. Wedel
Breached fiduciary duty by failing to disclose conflicts of interest
FAM agreed to pay disgorgement and prejudgment interest and an $85,000 penalty, Shamburger and Wedel agreed to pay $50,000 and $25,000 penalties, respectively. The SEC’s order also includes cease-and-desist orders against FAM, Shamburger, and Wedel; a censure against FAM; and a voluntary undertaking by FAM to relinquish its right to receive further trailing fees related to AFC III investments.

Observations from Examinations of Investment Advisers - Compliance, Supervision, and Disclosure of Conflicts of Interest
OCIE Risk Alert - Supervision Initiative
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

IA-5305 In the Matter of Account Management, LLC, Christopher de Roetth and Peter de Rotth
Breached  fiduciary duty to their largest client, an elderly investor, by recommending that she change her trust agreement in a way that would benefit Account Management after her death
Sanctioned and ordered to pay civil monetary penalties

IA-5304 In the Matter of Henry J. Wieniewitz, III
Sold unregistered securities
Barred from association and barred from participating in any offering of a penny stock

IA-5303 In the Matter of Swapnil Rege
Mispriced private fund investments, resulting in a large personal bonus
Rege agreed to a cease-and-desist order, an associational bar and investment company prohibition with a right to apply for reentry after three years, disgorgement of ill-gotten gains of $600,000 plus prejudgment interest, and a civil penalty of $100,000.

IA-5296 Release Intentionally Omitted by SEC

LR-24539 SEC v. Paul Alar and West Mountain, LLC
Fund adviser & principal charged with fraudulently over valuing assets in two funds they managed, allowing them to collect significantly inflated fees

IA-5302 In the Matter of Salus, LP et al.
Made materially false statements to prospective investors and in SEC filings
The respondents each consented to the entry of a cease-and-desist order; Salus and SAIC consented to a censure and an investment company bar, and Copeland and Prusa both consented to separate civil penalties of $25,000 each, and to permanent collateral associational bars and investment company bars.

LR-24533 SEC  v. Richard Vu Nguyen, et al.
SEC Obtains Preliminary Injunction in Ongoing Litigation for Fraud Targeting Vietnamese-American Community

Staff Statement on Opportunity Zones: Federal and State Securities Laws Considerations  
SEC and NASAA Explain Application of Securities Laws to Opportunity Zone Investments 
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

IA-5301 In the Matter of Hana Woosuk Byum
Denali Investors, LLC was an unregistered investment advisor solely owned and operated by Byun. Byun made unauthorized withdrawals from one of the funds Denali Investors managed to pay his personal expenses.
Byum is ordered to pay a civil monetary penalty of $50,000 and is barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter, with the right to apply for reentry after 3 years

IA-5300 In the Matter of The Robare Group, Ltd., Mark L. Robare, and Jack L. Jones, Jr.
Corrected Order scheduling briefs

IA-5299 In the Matter of Kwen Y. Chun
Convicted of misappropriating client funds - obtaining loans against clients’ insurance policies, or causing clients to obtain loans against their insurance policies, and diverting the funds to bank accounts that Chun had created and controlled in the names of firm clients or his relatives
Barred from association and  barred from participating in any offering of a penny stock

IA-5298 In the Matter of Jeffrey Gainer
Initial Decision has become final

IA-5297 In the Matter of Rosalind Herman
Initial Decision has become final

IA-5295 In the Matter of Kimm C. Hannan
In criminal case, convicted of securities fraud
Public hearing ordered

IA-5294 In the Matter of Michael Szafranski
Order vacating bars

IA-5290 In the Matter of Moshe Marc Cohen
Order vacating bars

Regulation Best Interest and the Investment Adviser Fiduciary Duty - Two Strong Standards that Protect and Provide Choice for Main Street Investors
Speech by Chairman Jay Clayton, Boston, Massachusetts (July 8, 2019)
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information and linked to the Plain English Description Tab under Regulatory Database rule 203-1 and new rule 204-5

IA-5284 List of Rules to be Reviewed Pursuant to the Regulatory Flexibility Act 

Orders vacating bars:
IA-5293 In the Matter of Bart C. Gutekunst
IA-5292 In the Matter of George Q. Stevens
IA-5291 In the Matter of Bruce F. Prevost and David W. Harrold
IA-5288 In the Matter of Eric Lipkin
IA-5287 In the Matter of David R. Wulf
IA-5286 In the Matter of  Kevin James O’Rourke
IA-5285 In the Matter of Oliver R. Grace, Jr.
IA-5283 In the Matter of  David Scott Cacchione

IA-5289 In the Matter of Pedro L. Gonzalez-Seijo
Pled guilty to bank fraud - was an independent insurance agent who offered variable annuities, among other products; converted client funds by depositing into his bank account for his own use (a) funds he received from clients intended for deposit into their insurance accounts, (b) funds he obtained by making unauthorized withdrawals from client accounts, and (c) funds the clients had authorized be withdrawn from their accounts for purpose of transferring the funds or investing the funds in a differenct product.
Barred from association and barred from participating in any offering of a penny stock.

Statement Regarding Offers of Settlement
SEC Chairman Jay Clayton (July 3, 2019)
- Factors that Drive Appropriate Settlements
- Forms of Contemporaneous Settlement Offers and Waiver Requests
Added to the IA Act UnwrappedTM Examination Tools Database - 2019 Information

IA-5278 In the Matter of James A. Windelmann, Sr., and Blue Ocean Portfolios, LLC
Order denying Motion for Summary Affirmance, granting Petitions for Review and scheduling briefs

IA-5270 In the Matter of The Parrish Group, LLC and Daryl M. Davis
Material misrepresentations by Parrish Group, and Davis, Parrish Group’s founder, sole owner, and sole manager, regarding Parrish Group’s investment advisory business; misled prospective clients about, assets under management, its clients, the number and identity of its employees, and its registration status with the SEC.
Parrish Group is censured; Davis is barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; Respondents are ordered to pay a civil monetary penalty of $184,767

LR-24526 SEC v. Thomas V. Conwell and Kerry L. Hoffman
SEC Charges Two Individuals for Fraud and Issuer for Unregistered Sale of Securities

LR-24528 SEC v. Daniel H. Glick, et al
Relief Defendant (David B. Slagter) Consents to Return III-Gotten Gains in Fraud Case Against IIIinois Investment Adviser

IA-5263 In the Matter of Fieldstone Financial Management Group, LLC and Kristofor R. Behn
Failure to disclose material conflicts of interest to advisory clients by Behn, and his RIA, Fieldstone Financial Management Group, LLC. Behn and Fieldstone also solicited an advisory client to invest $1 million in Fieldstone without disclosing that Behn planned to use much of the money to cover personal expenses.

Orders vacating bars:
IA-5282 In the Matter of Robert Feinblatt
IA-5281 In the Matter of Larry C. Grossman
IA-5280 In the Matter of Harvey Altholtz
IA-5279 In the Matter of Charles W. Adams
IA-5277 In the Matter of Duane Hamblin Slade
IA-5276 In the Matter of Jerry Gruenbaum, Esq.
IA-5275 In the Matter of William L. Walters
IA-5274 In the Matter of Saul Meyer
IA-5273 In the Matter of Corey Ribotsky
IA-5272 In the Matter of Toby G. Scammell
IA-5271 In the Matter of Kimon P. Daifotis
IA-5269 In the Matter of John V. Johnson
IA-5268 In the Matter of Brian J. Schuster
IA-5267 In the Matter of Rebecca L. Engle
IA-5266 In the Matter of Donald M. Stuthers
IA-5265 In the Matter of Rafael Sanchez

IA-5264 In the Matter of Laverne C. Moter
In criminal case, pled guilty to securities fraud
Barred from association and barred from participating in any offering of a penny stock

IA-5262 In the Matter of Avi Chiat, Esq.
In civil case, charged with fraud - SEC's complaint alleged that Chiat defrauded investors in the funds, and violated his fiduciary duty as an adviser to the funds, by making false representations to investors about the performance of the funds, including providing fabricated account statements to investors, and by failing to disclose important facts suggesting there was a high risk that Chiat’s partner, Yasuna Murakami, was stealing investors’ money.
Barred from association and suspended from appearing or practicing before the Commission as an attorney.

LR-24517 SEC  v. Amrit J. S. Chahal
IA-5261
In the Matter of Amrit J. S. Chahal
Chahal fraudulently solicited approximately $1.4 million from about 50 individuals by falsely claiming to be an experienced and successful trader who could generate above-market returns for clients through a low-risk trading strategy; in criminal case convicted of securities and commodities fraud and wire fraud; sentenced to prison
Barred from association

IA-5260 In the Matter of Daryl M. Payton
Insider trading
Barred from association

Golub Capital Investment Corporation, et al.
NoAction Letter under Advisers Act Sec. 205(b)(3)
Division of Investment Management notes that the position expressed in this letter applies only to the entities seeking relief, and no other entity may rely on this position.

LR-24511 SEC v. Donald S. LaGuardia, Jr.
Founder of Bankrupt Advisory Firm Charged with Fraud

LR-24510 SEC v. Avi Chiat
Final Judgment against Defendant in Hedge Fund Fraud Scheme

IA-5259 In the Matter of Edward Lee Moody, Jr.
LR-24508 SEC v. Edward Lee Moody, Jr., et. al.
Convicted of fraud for Ponzi scheme
Barred from association

IA-5258 In the Matter of Javier Rios
Ponzi scheme
Barred from association

IA-5257 In the Matter of Shervin Neman and Neman Financial, Inc.
Initial Decision has become final

IA-5256 Concept Release on Harmonization of Securities Offering Exemptions
Request for Comment - Comments due by Sept. 24, 2019.
The SEC is soliciting comment on several exemptions from registration under the Securities Act of 1933 that facilitate capital raising
Comments should be received on or before 90 days after publication in the Federal Register

IA-5255 Auditor Independence with Respect to Certain Loans or Debtor-Creditor Relationships
Final Rule Release
Amendments to the auditor independence rules to refocus the analysis that must be conducted to determine whether an auditor is independent when the auditor has a lending relationship with certain shareholders of an audit client at any time during an audit or professional engagement period
Effective 90 days after publication in the Federal Register

IA-5254 In the Matter of Jaswant Gill
Respondent was CEO of companies that claimed to be investment advisers and represented to investors that they were investing their money in certain pre-IPO and publicly traded securities/Ponzi scheme; he is currently incarcerated in a federal prison.
Public hearing ordered

IA-5253 In the Matter of Gerardo E. Reyes
Initial Decision has become final

LR-24501 SEC v. David Wagner, Downing Partners, LLC, Downing Investment Partners, LP, Downing Digital Healthcare Group, LLC, and Mark Lawrence
Fraud Charges in Healthcare Investment Scheme

IA-5252 In the Matter of Hugh Dunkerley
In a civil case, Dunkerley was convicted of fraud; in a subseqent criminal complaint, he pled guilty to securities fraud, bankruptcy fraud and falsification of records to obstruct a government investigation; he conspired with others to defraud clients by causing their funds to be invested in tribal bonds wiwthout disclosing material facts, and misappropriating proceeds of bond sales for personal use
Barred from association and barred from participating in any offering of a penny stock

Keynote Remarks at the Mid-Atlantic Regional Conference
SEC Chairman Jay Clayton
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

LR-24497 SEC v. Kimberly Pine Kitts
Final judgment against IA charged with fraud

LR-24486 SEC v. Syed Arham Arbab, Artis Proficio Capital Investments, LLC, and Artis Proficio Capital Management, LLC
SEC Seeks Emergency Relief to Halt Ponzi Scheme Run from College Fraternity House

IA-5251 In the Matter of David S. Goulding
In civil action, Goulding, Nutmeg's CCO, was convicted of allowing his father to use Funds' assets to pay personal expenses which were not supported by any documentation; failed to ensure that Nutmeg and the Funds maintained accurate financial records; and did not follow appropriate valuation standards in valuing the Funds.  In addition, he owned two limited liability companies which held Fund assets, and he was paid a percentage of the proceeds from the sale of the Funds’ assets, which facts were not disclosed to the Funds’ investors.
Barred from association

IA-5250 In the Matter of Kimberly Pine Kitts
In Massachusetts criminal case, convicted of engaging in schemes to defraud clients
Barred from association and barred from participating in any offering of a penny stock

IA-5249 Commission Interpretation Regarding the Solely Incidental Prong of the Broker-Dealer Exclusion from the Definition of Investment Adviser
Interpretation excludes from the definition of “investment adviser” any broker or dealer that provides advisory services when such services are “solely incidental” to the conduct of the broker or dealer’s business and when such incidental advisory services are provided for no special compensation
Added to the IA Act UnwrappedTM Releases Database

IA-5248 Commission Interpretation Regarding Standard of Conduct for Investment Advisers
Added to the IA Act UnwrappedTM Releases Database and linked to the term "fiduciary duty" in the Glossary & Definitions Database

IA-5247 Form CRS Relationship Summary - Amendments to Form ADV
IA-5247 Appendix A New Form ADV (including Form CRS)
IA-5247 Appendix B Instructions
IA-5247 Appendix C Feedback Form Comment Summary

Added to the IA Act UnwrappedTM Releases Database

34-86031 Regulation Best Interest - The Broker-Dealer Standard of Conduct
Added Exchange Act Release & linked to the new term "Regulation Best Interest" in the IA Act UnwrappedTM Glossary & Definitions Database

IA-5246 In the Matter of Christopher M. Lee A/K/A Rashid K. Khalfani
Initial Decision has become final

IA-5245 In the Matter of Deer Park Road Management Company, LP and Scott E. Burg
Hedge Fund Adviser to Pay $5 Million for Compliance Failures Related to Valuation of Fund Assets
Burg caused Deer Park's failure to implement the requirement to maximize the use of observable inputs and to implement adequate policies & procedures
Amongst its remedial efforts, Deer Park hired a new CCO with relevant expertise in compliance and valuation, revised its policies and procedures and implemented new valuation and pricing surveillance reports.

IA-5244 In the Matter of Anthony Savino
Engaged in manipulative securities trading

IA-5243 In the Matter of Sean D. Premock
In criminal case, convicted of securities fraud
Barred from association and barred from participating in any offering of a penny stock

IA-5242 In the Matter of Stephen Brandon Anderson
Defrauded clients by overcharging advisory fees
Anderson is prohibited from acting in a supervisory or compliance capacity or from charging advisory fees without supervision for at least three years, and must provide notice of the SEC order to clients and prospective clients.

IA-5241 In the Matter of Robert Kenneth Lindell, Jr.
In criminal case, convicted of obtaining unauthorized control over funds designated for the purchases of securities by his client and diverting the funds to his personal use and/or rather than using the funds designated by his client to purchase the securities, instead purchased the securities with other client funds or on margin.
Barred from associaion and barred from participating in any offering of a penny stock.

Safeguarding Customer Records and Information in Network Storage –  Use of Third Party Security Features
OCIE Risk Alert added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

IA-5240 In the Matter of Lawrence E. Penn, III
Notice that Initial Decision has become final

IA-5239 In the Matter of Brian Michael Berger
Notice that Initial Decision has become final

IA-5238 In the Matter of GL Capital Partners, LLC and GL Investment Services, LLC
Corrected Notice that Initial Decision has become final

IA-5237 Release Intentionally Omitted by SEC

IA-5236 In the Matter of J.S. Oliver Capital Mangement, L.P., and Ian O. Mausner
Fraudulent trade allocation by “cherry-picking” favorable trades for affiliated hedge fund clients to the detriment of other, unfavored client accounts, and misusing client commission credits called “soft dollars”
Mausner is barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter; and ordered to pay disgorgement of approximately $670,000
Added to the IA Act UnwrappedTM Risks/Significant Cases Tabs under Regulatory Database Rules 204-1, 204-2, 206(4)-7 & 206(4)-8 and linked to the terms "cherry-picking" and "soft dollars" in the Glossary & Definitions Database

IA-5235 In the Matter of NeoCap, LLC
Order cancelling IA registration

IA-5234 In the Matter of Oscar Ferrer Rivera
In criminal case pled guilty to aggravated identity theft; defrauded investors - used investor funds for personal benefit
Public hearing ordered

IA-5233 In the Matter of Jonathan A. Rivera-Padilla
In criminal case, convicted of fraud; used investor funds for personal use
Barred from association and barred from participating in any offering of a penny stock

IA-5232 In the Matter of Jeffrey Francis Thompson
In Colorado case, permanently revoked his IA Rep license - found guilty of charging clients unauthorized, unearned, and excessive fees, forging client signatures on advisory contracts, providing clients with inaccurate fee invoices, and filing a misleading Form ADV that failed to disclose certain fee arrangements and recent personal bankruptcy.
Barred from association

IA-5231 In the Matter of Bryan Lee Addington
Notice that Initial Decision has become final

IA-5230 In the Matter of Ascension Asset Management, LLC and Grenville M. Gooder, Jr.
Reached full agreement on a proposed schedule
Public hearing ordered

IA-5229 In the Matter of Corinthian Capital Group, LLC, Peter B. Van Raalte, and David G. Tahan
Corinthian misused assets in a private equity fund that it advised to the advantage of Corinthian and three of its principals. Corinthian failed to issue audited financial statements until more than 120 days after the fiscal years ended, violated the Custody Rule and the Compliance Programs Rule
Corinthian is censured and ordered to pay a civil monetary penalty of $100,000; Van Ralte ordered to pay $25,000, and Tahan ordered to pay $15,000.

How We Protect Retail Investors
Speech by OCIE Director Peter Driscoll
NRS Spring 2019 Compliance Conference (April, 2019)

Added to the IA Act UnwrappedTM Examination Tools Database - 2019 Information

IA-5228 In the Matter of Paul Peter Gierten
In criminal case, convicted of misappropriating client funds, mostly from senior citizens, for personal use.
Barred from association

LR-24461 SEC v. Christopher D. Dogherty et al
Ponzi scheme

IA-5226 In the Matter of Charter Capital Management, LLC and Steven Morris Bruce
Negligently breached fiduciary duties to funds
Censured and ordered to pay a civil monetary penalty of $40,000, plus pre-judgment interest

LR-24458 SEC v. Eric D. Lyons, et al.
SEC Halts Misappropriation and Fraudulent Securities Offering

IA-5225 In the Matter of Charles Myrick Winstead
Pled guilty to embezzlement - received a check from an individual as payment for a Nationwide insurance policy and other Nationwide products. Winstead converted these funds to his own use instead of tendering the funds to Nationwide.
Currently incarcerated; public hearing ordered

LR-24455 SEC v. Motty Mizrahi et al.
Preliminary Injunction against Fraudulent IA Who Targeted Members of the Israeli-American Community

IA-5224 In the Matter of Matthew R. Rossi and SJL Capital, LLC
Defrauded advisory clients and investor in a hedge fund by misleading them regarding the nature and performance of Respondents’ investment strategy and by concealing trading losses
Rossi is barred from association and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter.

IA & BD Compliance Issues Related to Regulation S-P - Privacy Notices and Safeguard Policies 
OCIE Risk Alert (April 16, 2019) 
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

IA-5223 In the Matter of Stanley S. Bae
Fraudulent offering scheme and investment advisory fraud
Bae is barred from association and rohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter

SECret Garden 
Remarks by Commissioner Hester M. Peirce at SEC Speaks 2019
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

Important Issues for Investors in 2019 

Remarks by Rick Fleming, Investor Advocate at SEC Speaks 2019
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

IA-5222 In the Matter of Karen Bruton and Hope Advisors, LLC
Order regarding further proceedings
Ordered that these proceedings are consolidated under the caption above for purposes of any motions for summary disposition and hearings that may be required.

LR-24449 SEC v. Arif M. Naqvi and Abraaj Investment Management Limited
Dubai-based advisory firm and founder charged with misappropriating funds from a private equity fund client

IA-5221 In the Matter of Martin R. Stancik
Currently incarcerated - the criminal information against Stancik alleged that Stancik: (1) made false representations to his broker-dealer customers as to the use of their funds; (2) forged broker-dealer customer endorsements to falsely divert customer funds to entities under Stancik’s control; (3) created a false investment contract document for a broker-dealer customer; and (4) created false annual statements for an annuity and mailed those false statements to a broker-dealer customer’s home.
Barred from association and barred from participating in any offering of a penny stock.

LR-24447 SEC v. Gonzalo Ortiz
New Jersey IA Charged with Securities Fraud

IA-5220 In the Matter of Ascension Asset Management, LLC and Grenville M. Gooder, Jr.
Protective Order -  Division of Enforcement moved for a protective order “to govern the use and review of personally identifiable information” and “other sensitive identifying information pertaining to third parties” that may be present on documents that were obtained during the Division’s investigation” and which the Division plans to produce to Respondents  (“Discovery Material”).

Encouraging Smaller Entrants to Our Capital Markets
Remarks by Commissioner Elad L. Roisman at SEC Speaks 2019
Excerpt: For the equities market, a closer look at best execution requirements, especially in conjunction with the order protection rule (“OPR”) - exploring a comprehensive and non-prescriptive interpretation of the regulatory requirement for broker-dealers and investment advisers to achieve “best execution” and assessing whether the OPR is still needed or if adjustments are warranted.
Added to the IA Act UnwrappedTM Examination Tools Database - 2019 Information

Management’s Discussion and Analysis of the SEC
SEC Chairman Jay Clayton's Remarks at the 2019 SEC Speaks Conference
Including:
- SEC's request to Congress to lift the hiring freeze and add 100 positions
- Rulemaking agenda
- OCIE 2019 examination priorities
- Joint effort by Divisions of Investment Management and Trading & Markets to enhance and clarify the standards of conduct and mandated disclosures for BDs & IAs
Added to the IA Act UnwrappedTM Examination Tools Database/2019 Information

IA-5219 Notice of Intention to Cancel IA Registration of NeoCap, LLC
Registrant does not maintain the required assets under management to remain SEC-registered; has not filed an annual updating amendment for fiscal years 2017 and 2018, and appears to be no longer in business as an investment adviser. 

LR-24444 SEC v. Scott Newsholme
SEC Obtains Final Judgment and Bars IA for Defrauding Clients

IA-5218 In the Matter of Alonzo R. Cahoon
Misappropriated funds in the form of undisclosed “consulting fees"
Barred from association and barred from participating in any offering of a penny stock

 

Headline News

SEC Awards $450,000 to Compliance Whistleblower

Read more ...

 

SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies, Funds, and Investment Advisers Affected by COVID-19

Form ADV & Form PF Filing Date Extended to June 30, 2020
Read more ...

 

OCIE Statement on Operations and Exams – Health, Safety, Investor Protection and Continued Operations are our Priorities

Conducting exams off-site through correspondence except where absolutely necessary

Read more ...

 

Order Regarding Pending Administrative Proceedings

Requests filings to be submitted electronically

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SEC Takes Targeted Action to Assist Funds and Advisers
Permits Virtual Board Meetings and Provides Conditional Relief from Certain Filing Procedures

Read more ...

Updates

Brightline Solutions updates IA Act UnwrappedTM on a daily basis. Recent updates are listed below. Click HERE for a more detailed summary of the information.

Investors Remain Front of Mind at the SEC: Approach to Allocation of Resources, Oversight and Rulemaking; Implementation of Regulation Best Interest and Form CRS
Remarks by SEC Chairman Jay Clayton
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information

IA-5472 In the Matter of Barton W. Stuck

IA-5471 In the Matter of Adam Matthew Root

IA-5470 SemiAnnual Regulatory Flexibility Agenda

Getting Back to Basics - Protecting, Serving, and Empowering Investors  
Remarks by SEC Commissioner Allison Herren Lee before the Investment Advisers Association Compliance Conference
   - Investment Adviser Advertising
   - Climate Risk Disclosure
   - Proxy Reform
Added to the IA Act UnwrappedTM Examination Tools Database/2020 Information

LR-24780 SEC v. Donald H. Hunter

IA-5468 In the Matter of Nicholas J. Genovese

IA-5469 SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements
Form ADV & Form PF Filing Date Extended to June 30, 2020

IA-5467 In re: Pending Administrative Proceedings

LR-24773 SEC v. Brandon E. Copeland and E.B. & Copeland Capital, Inc.

IA-5456 In the Matter of E. Herbert Hafen

IA-5455 In the Matter of Daniel B. Vazquez, Sr.

LR-24769 SEC v. Stacey Beane, Justin Deckert and Travis Laska

LR-24767 SEC v. Kinetic Investment Group, LLC, et al

LR-24764 SEC v. E. Herbert Hafen

IA-5466 In the Matter of Randall S. Goulding

IA-5465 In the Matter of Marcus Boggs

IA-5464 In the Matter of HSBC Securities (USA) Inc.

IA-5462  In the Matter of Motty Mizrahi

IA-5461 In the Matter of Naya Ventures, LLC, Dayakar Puskoor, and Prabhakar Reddy

IA-5460 In the Matter of Bruce C. Worthington

IA-5458 In the Matter of Eric D. Lyons

IA-5457 In the Matter of Motty Mizrahi

IA-5463 Order under Section 206 of the Investment Advisers Act of 1940 Granting Exemptions from Speicified Provisions of the Investment Advisers Act and Certain Rules Thereunder
Order granting extention to file Form ADV and Form PF until April 30, 2020

IA-5459 In the Matter of John Thomas Capital Management Group LLC and George R. Jarkesy Jr.

IA-5454 Exemptions From Investment Adviser Registration for Advisers to Certain Rural Business Investment Companies
FINAL RULE
Release added to the IA Act UnwrappedTM Releases Database; amendments reflected under Regulatory Database Rules 203(l)-1 & 203(m)-1