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Our Take Blog

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Our Take Blog
Advisers Banned for Inflating Credentials and Prospects 

Advisers Banned for Inflating Credentials and Prospects 

Two unregistered investment advisers were fined and barred from the industry for misrepresenting their credentials, business prospects, and performance to potential investors.  One of the advisers falsely claimed that he was ranked by Fortune Magazine as a “Rising Business Star.”  The other claimed that he received a degree from the University of Maryland and that he had several commitments from large investors.  Both misrepresented their investment performance.

OUR TAKE: Selling securities is not like selling soap, where “caveat emptor” rules.   Instead, firms and individuals may not make false statements about the product or their credentials, no matter how seemingly insignificant the misrepresentation.

 

http://www.sec.gov/litigation/admin/2015/33-9801.pdf

http://www.sec.gov/litigation/admin/2015/33-9800.pdf

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