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SEC Sues "Internet Investment Adviser" for Exam and Registration Violations

Steven.Lofchie@cwt.com's picture
Commentary by Steven Lofchie

In a Complaint filed in the U.S. District Court for the Southern District of Florida, the SEC alleged that a "purported" internet investment adviser firm and its president failed to provide books and records for examination. In addition, the SEC alleged the firm improperly registered with the SEC as an investment adviser under IAA Rule 203A-2(e) (Exemptions from prohibition on Commission registration).

The SEC is requesting a final judgment ordering the firm and its president to (i) be permanently enjoined from further violating the Investment Advisers Act Sections 203A ("State and Federal Responsibilities") and 204(a) ("Reports by Investment Advisers"), (ii) keep any records relevant to the Complaint, (iii) respond to discovery on an "expedited basis," and (iii) pay civil money penalties.

Commentary

The Complaint provides screenshots from websites that appear to show an individual attempting to profit from deceiving unsophisticated investors as to opportunities in companies having cures for coronavirus. It is worth taking a quick look at the Complaint to see these presumably fraudulent advertisements. 

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