The Securities and Exchange Commission (SEC) recently charged 38 entities with violating Sections 204(a) and 207 of the Investment Advisers Act of 1940.
According to the complaints filed in the United States District Court for the District of Colorado, the defendants filed Forms ADV with the SEC between 2025 and 2026 and made material misrepresentations and statements that could not be substantiated to falsely portray themselves as legitimate advisory firms to U.S. investors. This included listing places of business at addresses in Colorado where the defendants had no presence and providing phone numbers that were disconnected or belong to unrelated businesses.
The defendants disclosed an ownership structure and numerical data that was identical, or nearly identical, to multiple other purported exempt reporting advisers and claimed that the financial statements of the private funds they purportedly advised had been audited by one of two independent public accounting firms. The firms cannot be found in any public registry of federal or state accountancy firms.
In addition, the SEC alleges certain defendants displayed a fake certificate on their websites indicating they was registered with the SEC and that the defendants failed to respond to SEC counsel requests to provide records to substantiate information on their Forms ADV.