Adviser Settles SEC Charges That He Paid "Secret Referral Fees"

A Connecticut-based investment adviser agreed to pay more than $575,000 to settle SEC charges that he engaged in activities that included defrauding a client, attempting to mislead investigators, and "lying" to his other clients concerning the status of the SEC's investigation. The SEC Order found that the advisor "secretly paid a lawyer for referring a legal client’s large account" to his advisory firm and "disguise[d] the payments as legal services purportedly provided by the lawyer’s firm." The lawyer involved in the payment scheme agreed to pay over $90,000 to settle SEC charges that he aided and abetted the adviser's securities law violations.