SEC Files Enforcement Action Against Investment Adviser for Misappropriation, Commingling & Pledging Client Assets

August 27, 2007

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Last week, the United States Securities and Exchange Commission (“SEC”) filed an emergency action against a registered investment adviser alleging the following unauthorized acts:

  • pledging of securities owned by clients;
  • placing client funds belonging to segregated client accounts to a “house” account;
  • commingling assets without ability to verify ownership of particular securities; and
  • providing clients with false account statements that failed to reflect actual holding and encumbrance/pledges.

The District Court for the Northern District of Illinois ordered the investment adviser to provide a full accounting of client assets within five days.

Posted by Bryan Hill
Labels: Enforcement