SEC Punishes RIA Firm That Allegedly Faked Its ADV To Look More Impressive

Thursday, September 22, 2011 00:31
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SEC Punishes RIA Firm That Allegedly Faked Its ADV To Look More Impressive

A California advisory firm has received a cease and desist order following an SEC investigation into its efforts to inflate its self-reported AUM and look bigger to prospects.

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Delta Global Advisors of Huntington Beach claimed it had $1.5 billion in client funds on its ADV form, but in reality it struggled to keep more than $9 million under management, the SEC says.

 

The irony here is that one of the motives seems to have been the desire to look big enough to qualify for SEC registration.

 

Delta's principal also failed to disclose that FINRA had already suspended him from the industry and that the firm was often at risk of folding due to litigation and various legal judgments against it.

 

He's been suspended again, this time for the next five years, and can add another $50,000 penalty to his outstanding legal liabilities.

 

 

http://sec.gov/litigation/admin/2011/34-65356.pdf

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