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Day: February 4, 2019

Non-U.S. Adviser Lied on Form ADV

The SEC censured and barred from the industry the principal of a non-U.S.-based investment manager for making false Form ADV statements.  The SEC charges the firm with falsely claiming (i) to have over $100 Million in assets under management, (ii) to have retained a nationally recognized auditor and prime broker for its funds, and (iii) a principal place of business in the United States, which was only a virtual office.  The SEC alleges that the Form ADV statements violated the antifraud rules of both the Securities Act and the Investment Advisers Act.  The SEC asserts jurisdiction because the respondents used interstate electronic communications to further the fraud.  The SEC claims proper venue because the defendants maintained a virtual office in New York. 

Form ADV is a securities law filing that gives rise to antifraud liability for misstatements.  The regulators will not overlook untruths as innocent marketing exaggerations.  Hire a lawyer or compli-pro to help prepare an accurate Form.