Action against Defendants, an advisory firm and its owner, for allegedly misleading clients regarding the firm’s association with a barred investment adviser.  According to the SEC, the barred adviser sold his investment advisory assets to Defendants in anticipation of a negative outcome in an SEC fraud investigation. The SEC alleges that, despite an SEC bar, the adviser continued to associate with Defendants by meeting with a prospective client and current clients in the firm’s offices and making discretionary changes to the clients’ investment accounts.  The SEC further alleges that Defendants permitted the adviser’s association with the firm, failed to disclose the bar to their clients, and made misleading statements to clients who inquired about the bar.  Finally, the SEC alleges that the adviser impersonated a client on a call to Defendant firm’s broker-dealer and impersonated Defendant owner on calls to the firm’s broker-dealer.

SEC Litigation Release

SEC Press Release