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Day: December 20, 2017

Adviser Inflated AUM and Touted Fake Returns

An investment adviser has been censured, fined, and barred from the industry for making misleading marketing representations.  The adviser used emails to claim inflated assets under management and tout a non-existent quantitative trading model and historical performance.  The adviser furthered his fraud by putting the fake product and returns on a hedge fund database that was accessed by potential investors.

OUR TAKE: The SEC has warned that it would bring cases against advisers for misleading marketing claims.  Firms should also note that the use of third party databases constitutes marketing subject to the Advisers Act’s anti-fraud rules.

https://www.sec.gov/litigation/complaints/2017/comp23808.pdf