Accused Adviser Lied to SEC Exam Staff
The SEC has charged the principal of an investment adviser with making unauthorized investments and then lying to the SEC exam staff. According to the SEC, the respondent used his concierge services to make unauthorized investments in movie projects in which he had a financial interest. The SEC alleges the respondent lied to clients and forged documents to effect his scheme. The SEC further asserts that the respondent lied to SEC examiners who questioned the transactions and created false documents to support his lies.
OUR TAKE: Making unauthorized investments will lead to enforcement actions and civil penalties. Lying to the SEC makes the situation much worse by leading to more punitive penalties and possible criminal prosecution. (See e.g. http://blog2.cipperman.com/2014/08/criminal-charges-for-submitting-false-docs-to-sec-examiners/).