SEC Brings Enforcement Action for Misrepresentations on Form ADV

January 11, 2012

The U.S. Securities and Exchange Commission (“SEC”) recently issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Calhoun Asset Management, LLC (“Calhoun”) and its principal for, among other things, making false and misleading statements on Calhoun’s Form ADV.

According to the Order, the firm’s principal allegedly grossly misstated Calhoun’s assets under management on the firm’s Form ADV in order to attract investors for two funds of funds.  According to Calhoun’s February 2009 Form ADV, the firm had $79.8 million in assets under management; the SEC’s Order alleges that the firm actually had $7 million in assets under management.  In addition, the SEC’s Order alleges that the principal misstated the assets under management for another investment adviser controlled by the principal.  For that firm, the principal regularly filed the Form ADV and stated the firm’s assets under management ranged from $24 million to $335 million, when in reality, according to the SEC, the firm had no assets under management.

On Thursday, January 12, 2012, RIA Compliance Consultants will be hosting a webinar, “Preparing your Form ADV Annual Amendment.”  During this webinar, we will review the Form ADV items that are required to be updated on an annual basis. The webinar will include a review of the ADV Part 1 instructions for calculating regulatory assets under management.  Our consultants will also discuss some of the common mistakes we see when investment advisors are filing their annual amendment. Additionally, our consultants will also address some of the other amendments and filings that may need to be made with your annual amendment, including those resulting from the recent SEC revisions to the Form ADV.  To register for this webinar, click here.

Posted by Bryan Hill
Labels: Enforcement, Form ADV, SEC, Webinar