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.

LR-24050 SEC v. Commonwealth Advisors, Inc. and Walter A. Morales
Hedge fund manager hid losses from investors
Morales is barred from association and ordered to pay a $130,000 penalty; Commonwealth Advisors' IA registration is revoked.

LR-24049 SEC v. Southridge Capital Management LLC, et al
Defendants illegally diverted investor money for use by other hedge funds that were illiquid and in need of cash
Hedge fund manager and firms ordered to pay nearly $13 mil

2018 Compliance Outreach Program National Seminar for IA & IC CCOs
Registration for the Seminar is open but in-person attendance is limited to 500; the April 12th Program will also be webcast live on the SEC's website
The Agenda has been posted in the IA Act UnwrappedTM Examination Tools Database/2018 Information

Share Class Selection Disclosure Initiative
SEC's Division of Enforcement will recommend that the Commission accept favorable settlement terms for investment advisers that self-report to the Division possible securities law violations relating to their failure to make necessary disclosures concerning mutual fund share class selection.
Added to the IA Act UnwrappedTM Examination Tools Database/2018 Information

IA-4856
In the Matter of Thomas J. Buck
Impermissibly exercised discretion when placing certain trades in certain customer accounts without obtaining authorization from the customer and made material misrepresentations and omissions to customers and investment advisory clients regarding the fees or commissions charged in their accounts.
Barred from association.

IA-4855 In the Matter of Victor M. Dandridge, III
In criminal case, pled guilty to wire fraud; misappropriated client funds
Barred from association and barred from participating in any offering of a penny stock

OCIE 2018 National Exam Program Priorities
Added to the IA Act UnwrappedTM Examination Tools Database - 2018 Information

IA-4854 In the Matter of Banc One Investment Advisors Corporation and Mark A. Beeson
Order Modifying 2004 Order Instituting Administrative Proceedings

IA-4853 In the Matter of Michael S. Moses
In criminal case, SEC's complaint alleged Moses and MIC misrepresented 1) Moses’ past experience as a trader or portfolio manager with large private fund advisers, 2) the past investment performance obtained through Moses’ investment strategy, 3) the safety of investments in a private fund, and 4) Moses’ personal investment in the Fund to raise money from investors
Public hearing ordered

IA-4852 In the Matter of Wedbush Securities, Inc.
Violations of the Customer Protection Rule - Wedbush’s weekly Rule 15c3-3 calculations to determine the net amount that should have been deposited into the Reserve Account included a significant error, resulting in weekly Reserve Account deficiencies
Wedbush will retain qualified independent consultant(s) to conduct a comprehensive review of the firm's current system of controls and procedures for: compliance with the net capital and customer protection rules; liquidity; opening of, and due diligence relating to, new correspondent and prime services accounts; and internal audit and risk management; pay disgorgement and prejudgment interest amd a civil monetary penalty of $1 million plus post-order interest.

LR-24038 SEC  v. Nicholas J. Genovese, Willow Creek Investments, LP, and Willow Creek Advisors, LLC
SEC Halts Ongoing Fraud by Purported Hedge Fund Manager

LR-24037 SEC v. James S. Polese, et al
Two Boston-based IAs charged with defrauding multiple clients by stealing nearly half a million dollars of client assets, along with other breaches of their fiduciary duty. In a parallel action, the U.S. Attorney's Office for the District of Massachusetts announced criminal charges.

IA-4851 In the Matter of Mohlman Asset Management, LLC and Louis G. Mohlman, Jr.
Engaged in conflicted transactions; made material misstatements and omissions concerning those transactions to investors; improperly used fund assets; filed inaccurate Forms ADV; had a deficient compliance program.
Barred from association for two years

IA-4850 Janney Montgomery Scott LLC; Notice of Application
Notice of application for an exemptive order under Advisers Act Sec. 206A providing an exemption from the written disclosure and consent requirements of Sec. 206(3) that would be similar to relief provided by Advisers Act Rule 206(3)-3T, which expired by its terms on December 31, 2016. The relief sought by the Applicant, if granted, would be subject to conditions similar to those under the Rule.
Release added to the IA Act UnwrappedTM Releases Database, and the term "Discretion" added to the Glossary & Definitions Database

IA-4849 Notice of Intent to Cancel Certain IA Registrations
IAs listed have not filed Form ADV amendments as required by Rule 204-1, or have indicated that they are no longer eligible to remain SEC-registered but have not filed Form ADV-W.

Private Funds Statistics (2017 Q2)  
Issued by the Division of Investment Management Analytics Office (Jan. 17, 2018)
Added to the IA Act UnwrappedTM Examination Tools Database - 2018 Information, and to the Plain English Description Tab under Regulatory Database Rule 204(b)-1

IA-4848 In the Matter of AmericaFirst Capital Management, LLC, Rick A. Gonsalves, and Robert L. Clark
Advisers Act
§206(2) violations
Disclosure violations while selling promissory notes to individual retail investors, including the firm’s advisory clients
AFCM Agreed to certain compliance undertakings and Respondents must pay civil monetary penalties

LR-24029 SEC v. Daniel H. Glick, et al
Operator of Investment Scheme Involving Seniors Pleads Guilty

IA-4847 In the Matter of Gemini Fund Services, LLC
Advisers Act §§206(1) & (2) violations
Transmitted fake inflated net asset values (NAVs)
Will retain an Independent Compliance Consultant; pay disgorgement, prejudgment interest and a civil monetary penalty of $400,000

SEC's Operations Plan under a Lapse in Appropriations and Government Shutdown
Added to the IA Act UnwrappedTM Examination Tools Database - 2018 Information

IA-4846 In the Matter of John V. Bivona
Misappropriated investor funds for personal use
Barred from association; barred from participating in any offering of a penny stock

IA-4845 In the Matter of Frank G. Mazzola
Diverted investor funds for personal use - Improperly associated with IA during colateral bar and participated in the offer and sales of securities without the necessary registration or exemption from registration for those offers and sales
Barred from association and barred from participating in any offering of a penny stock

IA-4844 In the Matter of John Tarpinian
Undisclosed principal trades while he was associated with a dually registered IA/BD; engaged in trades between a brokerage proprietary trading account and advisory client accounts, without first providing written disclosure that that he was effecting the trades as a principal or obtaining client consent
Ordered to pay disgorgement, prejudgment interest and a civil monetary penalty of $50,000

IA-4843 In the Matter of Anthony P. Chiera and Jeffrey R. Belfiore
Insider trading
Chiera agreed to pay disgorgement, prejudgment interest and a civil monetary penalty, as well as to an associational and penny stock bar with a right to reapply after four years. Belfiore agreed to pay a $25,000 penalty and to be barred from acting as an officer or director of a public issuer for a period of four years.

IA-4842 Adjustments to Civil Monetary Penalty Amounts
Annual Notice of Inflation Adjustments
These amounts are effective beginning on January 15, 2018

IA-4841 In the Matter of James C. Tao
Made false and misleading statments, failed to act in the best interest of his clients; Ponzi scheme
Barred from association and barred from participating in any offering of a penny stock

IA-4840 In the Matter of Donna Boyd
Violated Exchange Act
§15(a) by selling away from her associated registered broker and acting as an unregistered broker
Barred from association and barred from participating in any offering of a penny stock

IA-4839 Amendments to Investment Advisers Act Rules to Reflect Changes Made by the FAST Act
Final Rule Release
Pending amendments reflected in IA Act UnwrappedTM Regulatory Database Rules 203(l)-1 & 203(m)-1

IA-4838 In the Matter of PNC Capital Advisors, LLC
Order granting exemption from Rule 206(4)-5(a)(1)
Added to IA Act UnwrappedTM Regulatory Database Rule 206(4)-5 No-Action/Exemptive Request Tab

IA-4837 In the Matter of Khaled "Kal" Bassily
LR-24023 SEC v. Khaled "Kal" Bassily
Participated in a fraudulent scheme to conceal from transition management customers the routine practice of routing their orders for the purchase or sale of securities to an offshore affiliate, which would take substantial mark-ups and mark-downs, which customers incurred in addition to the disclosed commissions they paid
Barred from association; ordered to pay over $975,000

IA-4836 In the Matter of LKL Investment Counsel, LLC and Mark H. Love
Compliance-related deficiencies, misrepresentations in Forms ADV, and failure to produce documents to SEC exam staff
Ordered to comply with certain undertakings, subject to limitations and prohibitions on compliance-related activities, and ordered to pay civil monetary penalties

LR-24022 SEC v. Gaughran, et al
Attorney & Accountant Charged with Aiding/Abetting IA's $9 Mil Theft from Charity Client

IA-4835 In the Matter of Train, Babcock Advisors, LLC
Misappropriated investor funds; failed to comply with Custody & Compliance Programs Rules; made false statements on Forms ADV
Agreed to file Form ADV-W withdrawing registration; ordered to pay disgorgement, prejudgment interest and a civil monetary penalty

IA-4834 In the Matter of Southwind Associates of NJ Inc., William Scott Villafranco, and Anthony LaPeruta
Recordkeeping, Custody, Compliance Programs and Reg S-P violations
LaPeruta is subject to limitations on his activities; Southwind and Villafranco are ordered to pay a civil monetary penalty

IA-4833 In the Matter of Team Financial Asset Management, LLC, Team Financial Managers, Inc., and James L. Dailey
Misrepresentations & omissions concerning material changes in the investment strategy of a fund that led to catastrophic losses and the ultimate collapse of the fund.
Barred from association and ordered to pay disgorgement, prejudgment interest and a civil monetary penalty

IA-4832 In the Matter of Packerland Brokerage Services, Inc., and Atlas Capital Management Corp.
Disclosure & best execution failures related to the selection of a particular class of mutual fund shares by Packerland and Atlas; Form ADV misrepresented that Packerland would disclose to clients all of its fees and any compensation it received for the sale of securities; compliance programs rule violations
Ordered to pay disgorgement, prejudgment interest, and civil monetary penalties

IA-4831 In the Matter of Merrill Lynch, Pierce, Fenner & Smith Incorporated
Failed to Comply With Anti-Money Laundering Laws
Ordered to pay a civil monetary penalty of $13 million

IA-4830 In the Matter of TPG Capital Advisors, LLC
Inadequate disclosures that involved a breach of fiduciary duty by private equity fund adviser; Compliance Programs Rule violations
Commission considered the cooperation afforded the Commission staff after TPG was contacted. Throughout the investigation, TPG voluntarily and promptly provided documents and information, met with the staff on multiple occasions and provided detailed factual summaries of relevant information, was extremely prompt and responsive in addressing staff inquiries.
Ordered to pay disgorgement and prejudgment interest

IA-4829 In the Matter of Matrix Capital Markets, LLC and Nicholas M. Mitsakos
Made false & misleading statements to prospective investors and financial institutions in order to raise funds for investment vehicles to be managed by Matrix and Mitsakos, included lying about investment returns, assets under management, and broker and auditor relationships; misappropriated investor funds.
Mitsakos is barred from association and barred from participating in any offering of a penny fund

LR-24019 SEC  v. Stephen C. Peters, VisionQuest Wealth Management, LLC, VisionQuest Capital, LLC, and VQ Wealth, LLC
Ponzi Scheme

LR-24017 SEC  v. Ronald A. Fossum, Jr. and Alonzo R. Cahoon
IA & Business Partner Charged in Multi-Million Dollar Scheme

IA-4828 In the Matter of Courtlin L. Holt-Nguyen
LR-24018 SEC v. Matrix Capital Markets, LLC, Nicholas M. Mitsakos and Courtlin L. Holt-Nguyen
Prepared false & misleading statements regarding investment returns that were included in written marketing materials t were sent to prospective investors and financial institutions in order to raise funds for investment vehicles to be managed by Matrix and its principal
Barred from association

LR-24014 SEC v. Justin D. Meadlin and Hyaline Capital Management, LLC
Judgments on Consent against IA and Co-Founder; Co-Founder Barred from Securities Industry

LR-24011 SEC  v. Louis G. Mohlman, Jr., et al
IA Charged with Fraudulently Engaging in Conflicted Transactions and Misleading Investors

IA-4827 In the Matter of Justin D. Meadlin
Induced clients to invest through fraudulent misrepresentations and material omissions; disseminated emails to prospective investors and clients, which materially inflated Hyaline’s AUM; touted a fictitious quantitative fund in email solicitations; published false historical performance returns
Barred from association for 5 years
Added to IA Act UnwrappedTM Regulatory Database Rule 206(4)-1 - Risks/Significant Cases Tab

IA-4826 In the Matter of Coastal Equities, Inc., and Coastal Investment Advisors, Inc.
IA & BD Failed to Supervise Former President
Added to the IA Act UnwrappedTM Regulatory Database - Rule 206(4)-7 Significant Cases

LR-24007 SEC v. Westport Capital Markets, LLC and Christopher E. McClure
IA & Principal Charged with Enriching Themselves at the Expense of Clients

ICI Securities Law Developments Conference - Keynote Address 
Dalia Blass Director, Division of Investment Management
Added to the IA Act UnrwappedTM Examination Tools Database - 2017 Information

IA-4824 In the Matter of Institutional Investor Advisers, Inc.
IA-4823
In the Matter of Hortner Investment Management, LLC
IA-4822 In the Matter of Ameriprise Financial Services, Inc.
Violations resulting from reliance on F-Squared documents that contained material misstatements
Censured and fined

LR-24003 SEC v. James C. Tao and Donna Boyd (f/k/a Donna Chen)
Financial Adviser Settles Charges for Defrauding Private Equity Fund Investors

IA-4821 In the Matter of William P. Carlson, Jr.
In criminal case, pled guilty to participating in a scheme to obtain money and property from an advisory client by means of materially false and fraudulent pretenses and representations and by concealing material facts
Barred from association

IA-4820 In the Matter of Paritosh Gupta, Adi Capital Management LLC, Nehal Chopra, and Ratan Capital Management, LP
Improper sharing of confidential information and advice – obtained via position as a senior research analyst with a hedge fund adviser

IA-4819 In the Matter of Brahman Capital Corp.
Supervisory & compliance failures by hedge fund adviser

IA-4818 In the Matter of Paul Edward "Ed" Lloyd, Jr., CPA
Order Cancelling Oral Argument

IA-4817 In the Matter of Paul Leon White, II
Corrected Order Dismissing Review Proceeding; Notice of Finality of Initial Decision

IA-4816 In re: Pending Administrative Proceedings
SEC Ratifies Appointment of Administrative Law Judges

IA-4815 In the Matter of Lynn Tilton, Patriarch Partners, LLC, et al
Initial Decision has become final

IA-4814 In the Matter of ZPR Investment Management Inc.
Order Scheduling Briefs

IA-4813 In the Matter of Hartford Investment Financial Services, LLC, et al
Order Modifying 2006 Order - Amended Offer of Settlement

IA-4812 In the Matter of Gray Financial Group, Inc., Laurence O. Gray, and Robert C. Hubbard, IV
Recommended, offered and sold investments in a Gray Financial proprietary fund of funds to public pension clients; these investments did not comply with the restrictions on alternative investments imposed by Georgia law; made material misrepresentations
Gray Financial has agreed to not act as an investment adviser; Gray and Hubbard are temporarily barred from association

IA-4811 In the Matter of Lawrence E. Penn, III
In criminal case pled guilty to Grand Larceny; engaged in a fraudulent scheme to misappropriate approximately $9 million from a private equity fund in order to provide additional assets to spend on his business and personal expenditures
Public hearing ordered

FY 2017 Enforcement Results
Enforcement Division Report on Priorities and FY 2017 Results
Added to the IA Act UnwrappedTM Examination Tools Database

IA-4810 In the Matter of Stephens Inc.
Order Granting Exemption from Rule 206(4)-5

Added to the IA Act UnwrappedTM Releases Database and to Regulatory Database Rule 206(4)-5 No-Action Tab, Exemptive Requests

IA-4804 In the Matter of Donald F. Lathen, Jr., Eden Arc Capital Management, LLC, et al
Notice that Initial Decision has become final

LR-23984 SEC v. Jay Costa Kelter
Charged with Defrauding Retirees

IA-4809 In the Matter of Patric Ken Baccam
Fraud
Public hearing ordered

IA-4808 In the Matter of Paul Edward "Ed" Lloyd, Jr. CPA
Order Rescheduling Oral Argument

IA-4807 In the Matter of Paul H. Ellison
Solicited investors, misrepresented and concealed the identity of the other Aptus principal, who was a convicted felon and disbarred attorney
Barred from association and barred from participating in any offering of a penny stock

IA-4806 In the Matter of James P. Kolf
Ponzi scheme - sold unregistered securities
Barred from association and barred from participating in any offering of a penny stock; state registrations permanently revoked

IA-4805 In the Matter of Tamer F. Moumen
Fraud
Barred from association

IA-4803 In the Matter of UBS Financial Services
Firm disadvantaged customers 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 mutual funds when less expensive share classes were available; did so without disclosing that it would receive greater compensation from purchases of the more expensive share classes
Firm must make reasonable additional efforts to attempt to complete distribution of approximately $617,490; ordered to pay a civil monetary penalty of $3,500,000

IA-4802 In the Matter of Kenneth P. Krueger
Cherrypicking - disproportionately allocated day trades to personal accounts
Barred from association and barred from participating in any offering of a penny stock; ordered to pay disgorgement and prejudgment interest and pay a civil monetary penalty of $80,000

IA-4801 In the Matter of Canterbury Consulting, Inc.
Failure to supervise a former managing director and minority owner associated with Canterbury, who engaged in fraudulent trade allocations – “cherry-picking"; did not adopt and implement policies and procedures reasonably designed to prevent preferential trade allocations, and did not meet record keeping requirements relating to distributing the firm’s Form ADV Part 2 to clients
Ordered to pay disgorgement, prejudgment interest, and a civil monetary penalty

IA-4800 In the Matter of Augustine Capital Management, LLC, John T. Porter and Thomas F. Duszynski, CPA
Respondents Caused Fund to Engage in Conflicted Transactions without Disclosing the Conflict and Obtaining Consent; Improperly Charged Investors for ACM’s Expenses; Concealed Losses and Bankruptcies from Investors; Provided False Account Statements; Denied Investor Redemption Requests and Prevented Investor Exits from the Fund
Barred for 3 years, ordered to pay disgorgement, prejudgment interest and civil monetary penalties

Securities Industry and Financial Markets Association (SIFMA)
No-Action Relief under Advisers Act Sec. 202(a)(11)
Temporary No-Action Relief for BDs Receiving Payments for Research from Investment Managers Subject to MiFID II
Added to the IA Act UnwrappedTM No-Action Letters Database

Investment Company Institute
No-Action Relief under Advisers Act Sec. 206
Request for No-Action Relief for Advisers to Aggregate Client Orders
Added to the IA Act UnwrappedTM No-Action Letters Database

IA-4799 In the Matter of Brian J. Keenan
In criminal case, pled guilty to Grand Larceny - misappropriated assets from client accounts to pay for personal expenses
Barred from association

IA-4798 In the Matter of Kevin J. Amell
In criminal case, pled guilty to securities fraud, currently incarcerated
Barred from association

IA-4797 Stephens Inc.
Notice of Application for Exemptive Order under Rule 206(4)-5(e)
Added to the IA Act UnwrappedTM Releases Database and to Regulatory Database Rule 206(4)-5 Pay to Play - No-Action/Exemptive Order Tab

LR-23970 SEC v. John H. Rogicki
IA/CCO Charged with Stealing $9 Million from Charitable Foundation

IA-4796 In the Matter of Brandon P. Long
Misled investors into believing that he and his recommended investments were affiliated with or approved by the federal government and/or the Thrift Savings Plan; failed to disclose the significantly higher annual fees and surrender charges and opened accounts with his BD without the investor’s knowledge or consent.
Barred from association and barred from participating in any offering of a penny stock

IA-4795 In the Matter of Jeffrey S. Preston
Recommended that  clients invest  in unsecured promissory notes issued by a real estate company. despite the fact that, the firm's attorney had cautioned him about the “enormous risk” of such an investment; falsely reassured clients that their principal would be safe while minimizing, and  failing to disclose, significant risks
Barred from association

IA-4794 In the Matter of Paul Edward "Ed" Lloyd, Jr., CPA
Order Changing Location of Oral Argument

IA-4793 In the Matter of Mark Megalli
Insider trading
Public hearing ordered

IA-4791 FAST Act Modernization and Simplification of Regulation S-K
Proposing Release added to the IA Act UnwrappedTM Releases Database
Proposed revisions reflected in IA Act UnwrappedTM Regulatory Database Rule 0-6

IA-4792 In the Matter of Sam Sadeghi
Insider trading
Barred from association

IA-4790  In the Matter of Danny S. Hood
In civil action the SEC alleged, in connection with the sale of annuities, Hood used documents that caused investors to believe that he and his recommended investments were affiliated with or approved by the federal government and/or the Thrift Savings Plan; failed to disclose the significantly higher annual fees associated with the investments and opened accounts with his BD without the investor’s knowledge or consent.
Barred from association and barred from participating in any offering of a penny stock

IA-4789 Semi-Annual Regulatory Flexibility Agenda

IA-4788 In the Matter of Paul Edward "Ed" Lloyd, Jr., CPA
Order rescheduling oral argument

IA-4787 In the Matter of John Austin Gibson, Jr.
Notice that Initial Decision has become final

IA-4786 In the Matter of GL Capital Partners, LLC and GL Investment Services, LLC
Notice that Initial Decision has become final

IA-4785 In the Matter of William D. Bucci
Notice that Initial Decision has become final

LR-23961 SEC v. Richard G. Cody
IA indicted for fraud and for lying to the SEC

IA-4784 In the Matter of Edward D. Jones & Co., L.P.
Order granting exemption from the written disclosure and consent requirements of section 206(3) of the Act to permit Applicant to engage in principal trading with nondiscretionary advisory client accounts subject to the terms and conditions contained in its application.
Added to the IA Act UnwrappedTM Releases Database and to Regulatory Database Rule 206(3)-2 No-Action/Exemptive Orders Tab

LR-23959 SEC  v. Tweed Financial Services, Inc. et al
Adviser Charged with Sending False and Misleading Account Statements to Investors

IA-4783 In the Matter of Paul Leon White, II
Order Dismissing Review Proceeding and Notice of Finality

IA-4782 In the Matter of Jeffrey Timothy Kluge
In criminal case, convicted of bank fraud
Barred from association and barred from participating in any offering of a penny stock

IA-4781 In the Matter of Perry H. Beaumont
IA-4780 In the Matter of SIX Financial Information USA, Inc.
Financial Services Firm and Former Valuation Expert Settle with SEC for Deceiving Client about Valuation Work
SIX agreed to pay disgorgement, prejudgment interest, and a civil penalty of $75,000 into a Fair Fund. The SEC will make a payment of $43,330 to the investment firm to reimburse it for the fees it paid for the services it never received. Beaumont agreed to be barred from the securities industry with a right to reapply after one year, and to pay a civil penalty of $50,000.

LR-23951 SEC  v. Tarek D. Bahgat, Lauramarie Colangelo, and WealthCFO LLC
IA Charged with Stealing Money from Clients

Information Regarding Regulatory Relief for Hurricane Victims
Added to the IA Act UnwrappedTM Regulatory Database - Rules 204-1 and 204-3 Disclosure & Recordkeeping Tabs

ID-1182 In the Matter of Lynn Tilton; Patriarch Partners, LLC. et al
Initial Decision dismisses charges concerning Respondents’ operation of three collateral loan obligation funds, known as the Zohar Funds

IA-4779 In the Matter of Avaneesh Krishnamoorthy
In criminal case, pled guilty to securities fraud; insider trading
Barred from associaiton and barred from participating in any offering of a penny stock

Testimony on Oversight of the SEC  
SEC Chairman Jay Clayton - Before the Senate Committee on Banking, Housing and Urban Affairs
Added to the IA Act UnwrappedTM Examination Tools Database - 2017 Information

IA-4778 In the Matter of VisionPoint Advisory Group, LLC
Failed to disclose that its owner and IA Reps received forgivable loans of more than $1.3 million and additional non-forgivable loans from a BD that provides clearing and custody services for VisionPoint’s advisory clients - did not disclose the loans or the conflict of interest arising from this compensation in SEC filings or to clients
Sanctioned - ordered to pay a civil moentary penalty of $45,000

IA-4777 In the Matter of 360 Financial, Inc.
Failed to disclose to clients that it received a forgivable loan of $446,356 from a BD and a separate non-forgivable loan from a broker that provides clearing and custody services for 360 Financial’s advisory clients - did not disclose the loan or the conflict of interest arising from this compensation in SEC filings or to clients.
Sanctioned - ordered to pay a $40,000 civil monetary penalty

IA-4776 In the Matter of TRH Financial LLC
Failed to disclose to clients that it received a forgivable loan of almost $350,000 from a BD that provides clearing and custody services for TRH’s advisory clients - did not disclose the loan or the conflict of interest arising from this compensation in SEC filings or to clients.
Sanctioned - ordered to pay a $35,000 civil monetary penalty

IA-4775 In the Matter of Brian J. Keenan
In criminal case, pled guilty to misappropriating client assets for personal use
Public hearing ordered

IA-4774 In the Matter of Aletheia Research and Management, Inc.
Cherry-picking; Codes of Ethics Failures
Investment Adviser Registration Revoked
Added to the IA Act UnwrappedTM Releases Database and to Risks/Significant Cases under Regulatory Database Rule 204A-1, Codes of Ethics

IA-4773 In the Matter of Marshall G. Eichenauer, Jr. and Sagent Wealth Management, LLC
Used money invested in a fund they managed to finance loans that personally benefitted Eichenauer

LR-23941 SEC v. Moses Investment Company, LLC and Michael S. Moses
IA & Owner Charged with Lying about Experience and Past Performance

IA-4772 In the Matter of Platinum Equity Advisors, LLC
Charged three private equity fund clients about $1.8 million more than it should have in broken deal expenses
Platinum consented to the entry of a cease-and-desist order and agreed to pay a total of $1,902,132 in disgorgement and prejudgment interest and a $1.5 million civil penalty

Statement on Cybersecurity  
SEC Chairman Clayton Discloses the Commission’s Cyber Risk Profile, Discusses Intrusions at the Commission, and Reviews the Commission’s Approach to Oversight and Enforcement 
Added to the IA Act UnwrappedTM Examination Tools Database/2017 Information

LR-23939 SEC  v. Francisco Illarramendi, et al.
United States v. Illarramendi
Final judgment against 8 entities used to perpeptrate multimillion dollar Ponzi scheme

IA-4771 In the Matter of George Russell Thorenson
scheme to manipulate the reported share price and volume of Abakan, Inc. common stock
Barred from association and barred from participating in any offering of a penny stock

IA-4770 In the Matter of Mark A. Gomes
Scalping
Barred from association for 5 years and ordered to pay a civil monetary penalty

IA-4769 In the Matter of Suntrust Investment Services, Inc.
Breached fiduciary duty to its advisory clients, made inadequate disclosures that failed to explain certain conflicts of interest, and had deficiencies in compliance policies and procedures in connection with its mutual fund share class selection processes
Pay disgorgement plus pre-penalty interest and pay a civil monetary penalty

The Most Frequent Advertising Rule Compliance Issues Identified in OCIE Exams of IAs
OCIE National Exam Program Risk Alert
Added to the IA Act UnwrappedTM Examination Tools Database/2017 Information and to Regulatory Database Rule 206(4)-1, the Advertising Rule

 

Headline News

SEC to Discuss Disclosure at Open Meeting
Will Consider Interpretive Release on Cybersecurity Disclosure
Read more...

SEC Opens Registration for April 12th National Compliance Outreach Seminar for ICs & IAs
Read more...

SEC Launches Share Class Selection Disclosure Initiative
Encourages Self-Reporting and the Prompt Return of Funds to Investors
Read more...

OCIE 2018 National Exam Program Priorities
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.

LR-24050 SEC v. Commonwealth Advisors, Inc. and Walter A. Morales

LR-24049 SEC v. Southridge Capital Management LLC, et al

2018 Compliance Outreach Program National Seminar for IA & IC CCOs
Registration for the Seminar is open but in-person attendance is limited to 500; the April 12th Program will also be webcast live on the SEC's website
The Agenda has been posted in the IA Act UnwrappedTM Examination Tools Database/2018 Information

Share Class Selection Disclosure Initiative
Added to the IA Act UnwrappedTM Examination Tools Database/2018 Information

IA-4856 In the Matter of Thomas J. Buck

IA-4855 In the Matter of Victor M. Dandridge, III

OCIE 2018 National Exam Program Priorities
Added to the IA Act UnwrappedTM Examination Tools Database - 2018 Information

IA-4854 In the Matter of Banc One Investment Advisors Corporation and Mark A. Beeson

IA-4853 In the Matter of Michael S. Moses

IA-4852 In the Matter of Wedbush Securities, Inc.

LR-24038 SEC  v. Nicholas J. Genovese, Willow Creek Investments, LP, and Willow Creek Advisors, LLC

LR-24037 SEC v. James S. Polese, et al

IA-4851 In the Matter of Mohlman Asset Management, LLC and Louis G. Mohlman, Jr.

IA-4850 Janney Montgomery Scott LLC; Notice of Application for Exemptive Order
Release added to the IA Act UnwrappedTM Releases Database, and the term "Discretion" added to the Glossary & Definitions Database

IA-4849 Notice of Intent to Cancel Certain IA Registrations
IAs listed have not filed Form ADV amendments as required by Rule 204-1, or have indicated that they are no longer eligible to remain SEC-registered but have not filed Form ADV-W.

Private Funds Statistics (2017 Q2)  
Added to the IA Act UnwrappedTM Examination Tools Database - 2018 Information, and to the Plain English Description Tab under Regulatory Database Rule 204(b)-1

IA-4848 In the Matter of AmericaFirst Capital Management, LLC, Rick A. Gonsalves, and Robert L. Clark

LR-24029 SEC v. Daniel H. Glick, et al

IA-4847 In the Matter of Gemini Fund Services, LLC