/SEC Charges Investment Adviser for Improperly Registering and Violating Multiple Rules

SEC Charges Investment Adviser for Improperly Registering and Violating Multiple Rules


On April 5th, 2018, the Securities and Exchange Commission (SEC) charged an investment adviser for improperly registering and violating several commission rules.

According to the SEC, the sole owner of an investment firm falsely claimed more than $100 million in assets under management (AUM) from 2012 through 2016 to meet the minimum eligibility requirement for SEC registration. However, according to the SEC, approximately $100 million of the assets under management was not continuously or regularly managed, and thus should not have been included in the adviser’s AUM calculation.  The owner of the firm also violated the custody rule by failing to provide quarterly statements to clients and by failing to organize an annual surprise audit of assets.  Lastly, the owner of the firm failed to comply with the Books and Records Rule.

The owner of the firm has agreed to pay $20,000 in settlement charges and will be suspended from the industry for 12 months.


Reporting false information to the SEC can lead to public enforcement action.  Accordingly, advisers should be prepared to provide supporting documentation confirming information reported to the SEC, whether through SEC filings such as the ADV or during an exam.

If you have any questions or concerns about how this proceeding relates to you or your firm, please reach out to Fairview®.

About the Author:

Founded in 2005 with the goal of developing streamlined back office solutions for investment advisers, Fairview® is now servicing investment advisers, foundations, and funds with over $196 billion in collective assets.