SEC Action Leads to Criminal Charges against Investment Adviser
The U.S. Attorney’s Office for the District of Massachusetts has commenced criminal proceedings against an investment adviser accused of making misrepresentations that induced clients to invest in forex transactions. The criminal charges follow an SEC civil trial where a federal judge found the defendant liable for violations of various anti-fraud rules and ordered disgorgement and penalties in excess of $1 Million. The SEC charged that the defendant made unauthorized transfers from client accounts to engage in the forex trading.
OUR TAKE: While not typical, SEC civil charges can lead to criminal proceedings. This may become more prevalent now that a former prosecutor, who often heralds the SEC’s law enforcement mission, heads the Commission.