A registered investment adviser pleaded guilty to criminal charges for making false statements to SEC examiners.  The SEC also commenced an enforcement action alleging that the defendant significantly inflated assets under management to attract clients which it then defrauded through advance fee schemes.  The exam team initially uncovered the alleged conduct and referred the matter to the Enforcement Division, which then referred the matter to the U.S. Attorney’s Office.  

OUR TAKE: The SEC is a federal government agency with the ability to refer matters to the U.S. Attorney for criminal prosecution.  Put more clearly, lying to SEC examiners can get you an invitation for an extended stay in a government housing facility.