SEC REJECTS FUND OFFICER’S DEFENSE THAT HE WAS FOLLOWING ORDERS
A fund sponsor’s chief compliance officer who also served as the fund’s secretary was barred from the industry and fined for submitting false invoices to the fund, thereby unjustly enriching himself and the fund sponsor. The SEC rejected the Respondent’s argument that he was merely following orders of his boss. The SEC opined that the Respondent knew that he participated in a scheme to falsify invoices and personally profited.
OUR TAKE: Although the SEC didn’t explicitly say so, it seems clear from the described testimony that whether or not the Respondent knew his specific acts were illegal, he did understand that he was falsifying invoices and, as a compliance officer and fund officer, he had a higher standard of care.