SEC Revokes Investment Adviser Registration Following Misconduct Findings

The SEC revoked an investment adviser's registration after a court found the firm allowed a relative who was barred from the securities industry to access clients for years and concealed this fact. The firm was sued by the SEC in 2018, and a jury later found the firm violated the Advisers Act's antifraud provisions. The firm's custodial broker-dealer ended its management agreement after discovering the relative impersonated a client on phone calls.

The action highlights the regulatory oversight of financial firms regarding compliance and conflicts of interest. The firm previously faced a permanent injunction and a $400,000 civil penalty after the court found the firm acted knowingly or recklessly.

The SEC investigation led to a civil complaint against a company involving financial industry regulatory bodies, prompting the Financial Industry Regulatory Authority to issue a regulatory notice.