Fund CFO Barred from Industry and Fined for Covering Up Error
The CFO/Treasurer of a large fund complex agreed to an industry bar and a fine for falsifying mutual fund records. The respondent failed to ensure that certain advances were made from the fund sponsor to certain liquidating mutual funds in advance of fair fund distributions related to an enforcement action. During the process of documenting the distributions, the fund sponsor discovered the shortfall. After an investigation, the firm discovered that the respondent falsified custodial confirmations and trial balances to hide her mistake. The SEC charged the respondent with violating Section 34(a) of the Investment Company Act, which makes it unlawful to alter a fund’s books and records.