It's Official: The SEC Is Checking ADV Claims And Punishing "Creative" Errors Hot

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Calhoun Asset Management got into the hedge fund business back in 2006, claiming that its advisory assets had surged from a healthy $27 million in 1999 to over $200 million.

 

Unfortunately, the SEC can't find any record of the Illinois firm ever running more than $3 million during that time period.

 

Likewise, by 2009 Calhoun claimed that its AUM was up around $80 million. It was maybe in the $7 million range.

 

As the SEC complaint points out, Calhoun principal Krista Ward "herself completed and electronically signed" the ADV forms throughout this period for an affiliated firm, Skore Financial Management -- and the figures look equally inflated.

 

The regulators have other problems with this firm, but one thing is clear: they're putting their money where their mouth is and are finally fact-checking disclosures.

 

For those of us who thought they were doing it all along, it's a little bittersweet. But late is better than never.

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