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SEC Charges Investment Adviser for Misleading Retail Investors

SEC Charges Investment Adviser for Misleading Retail Investors


On July 18th, 2018, the Securities and Exchange Commission (SEC) charged a registered investment adviser and its chief executive officer (CEO) with distributing investor money in precarious investments and hiding the substantial commissions made in return.

According to the SEC, $19 million in senior citizen, or near-retirement, individuals’ retirement savings and pensions plans were put into “four risky, illiquid private offerings.”  The adviser charged fees for financial advice, but allegedly failed to disclose the high commissions they were making off these “risky and unsuitable” investment recommendations.  As a result, the adviser was allegedly over-billing some its clients.

The SEC’s final complaint includes charges against the advisory firm and the CEO for being in violation of the anti-fraud and registration provisions under the federal securities laws.  The SEC seeks disgorgement of ill-gotten gains, plus interest and other permanent injunctions.


The defendants of this case violated their fiduciary duty by failing to prioritize their client’s interests ahead of their own and by veiling the conflicts created by the commissions made of the already risky recommendations.

If you have any questions about this case or about your obligations as a fiduciary, please reach out to Fairview directly.