1. On March 3, 2025, Reuters reported that the SEC is offering some employees $50,000 if they choose to resign or to retire under an early retirement program, according to an agency memo. The SEC and other federal agencies have been looking at ways to cut staff and costs to meet demands from President Donald Trump’s administration. SEC employees have until March 21 to decide, according to a February 28 all-staff memo from Ken Johnson, the SEC’s chief operating officer.
2. On February 28, 2025, the SEC announced it will hold a roundtable discussion on artificial intelligence in the financial industry. The event takes place on March 27th from 9 a.m. to 4 p.m. and is open to the public for either in-person or virtual attendance. The AI roundtable will discuss the risks, benefits, and governance of AI in the financial industry. SEC Acting Chairman Mark Uyeda and SEC Commissioners Hester Peirce and Caroline Crenshaw are expected to deliver remarks. https://www.sec.gov/newsroom/press-releases/2025-48
3. On February 28, 2025, SEC Commissioner Caroline Crenshaw, a democrat, issued a statement in support of enforcement staff. Crenshaw statement stated “By law and in practice, responsibility for SEC action lies with its presidentially-appointed Commissioners, not its career staff. Commissioner Peirce, my colleague and head of the SEC Crypto Task Force, spoke to this yesterday when she said that staff “appropriately worked hard to execute as effectively as possible the Commission’s directives” on an enforcement matter. No matter our policy differences, this is something on which we wholeheartedly agree – there is no critique to be made of hardworking civil servants for simply doing their jobs.”
4. On February 28, 2025, the SEC the announced that it filed charges against Justinas Butkus, of Lithuania, and two companies he owned and controlled, HMC Trading LLC and HMC Management LLC, for fraudulently raising approximately $4.1 million from 64 investors by selling interests in mutual funds that did not exist. As alleged in the SEC’s complaint, in late 2021, Butkus, under the alias Darius Karpavicius, operated fictitious investment firms TBO Capital Group and Gray Capital Group and offered investors shares in sham mutual funds through the firms’ websites, a press release, and internet advertisements, all of which made numerous materially false and misleading statements. According to the complaint, these websites and other materials falsely stated, among other things, that the TBO Capital and Gray Capital mutual funds were managed by industry professionals with decades of experience and achieved years of high-yield investment returns. In reality, the complaint alleges, the managers did not exist, their biographies were fake, and TBO Capital Group and Gray Capital Group never made any investments. Rather, as alleged, the entire operation was a fraud run by Butkus to enrich himself. Butkus allegedly used some of the investors’ money to operate his fraudulent scheme, but stole most for his personal benefit, such as dining at restaurants, cash withdrawals, and crypto asset purchases. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26259
5. On February 27, 2025, the SEC announced that the Commission has filed a joint stipulation with Coinbase Inc. and Coinbase Global Inc. to dismiss the ongoing civil enforcement action against the two entities. On January 21, 2025, the Commission announced the formation of the Crypto Task Force, which is dedicated to helping develop a comprehensive and clear regulatory framework for crypto assets. Given the pending work of the Crypto Task Force, the Commission dismissed this matter. https://www.sec.gov/newsroom/press-releases/2025-47
6. On February 26, 2025, the SEC charged Alan Burak, founder of Never Alone Capital LLC, with orchestrating a fraudulent scheme that raised approximately $4 million, most of which Burak misappropriated for personal expenses. The SEC’s complaint alleges that, between 2018 and 2023, Burak engaged in a fraudulent scheme to recruit investors in his so-called investment fund, Never Alone Capital LLC, by falsely representing himself as a wealthy hedge fund owner, telling investors that Never Alone was an investment fund, and claiming that investor money would be invested in “Wall Street” pursuant to a complex investment strategy, in some cases with a guaranteed return. Burak allegedly raised approximately $4 million from at least 17 investors, several of whom he met through a company that provides financial education programs in Spanish to the Latino community. However, as alleged in the complaint, Burak did not invest the money as he represented that he would. In fact, as alleged, Burak misappropriated the bulk of investor deposits, including to pay credit card charges for, among other things, luxury skin care and payments to an adult-only subscription service. Burak also allegedly sent investors false account statements that generally showed consistently positive returns, when in fact investors were consistently losing money. Burak eventually stopped responding to investors and, in an audio recording from July 2022, he stated, among other things, that he was fake, he did not have a real business, and he was stealing money from people. https://www.sec.gov/newsroom/press-releases/2025-44
7. On February 14, 2025, the SEC charged One Oak Capital Management LLC, a registered investment adviser, and Michael DeRosa, a former One Oak investment adviser representative, for misconduct related to advisory services provided to retail clients. One Oak and DeRosa recommended that DeRosa’s customers at an unaffiliated broker-dealer, at which he was simultaneously employed, convert more than 180 brokerage accounts to advisory accounts at One Oak. Most of these customers were elderly and had been long-time customers of DeRosa’s at the broker-dealer, which charged the customers on a commission basis. One Oak and DeRosa ignored their fiduciary duty and failed to adequately disclose that the conversions from brokerage accounts to advisory accounts would result in significantly higher fees for the clients and increased compensation for DeRosa; nor did they disclose the resulting conflict of interest. One Oak was ordered to pay a civil money penalty of $150,000. DeRosa was ordered to pay a civil money penalty of $75,000. https://www.sec.gov/newsroom/press-releases/2025-39
8. On February 14, 2025, a final judgement was entered against Sakthivel Gounder, for misrepresentations and omissions about the nature and profitability of the investments, the trading strategies used, and the use of certain investor funds. Gounder was barred. https://www.sec.gov/files/litigation/admin/2025/34-102431.pdf
9. On February 11, 2025, the SEC instituted administrative proceedings against Naufal Sanaullah, the former Chief Risk Officer and Chief Macro Strategist of EIA All Weather Alpha Fund I Partners, LLC, the investment adviser and general partner of EIA All Weather Alpha Fund I, L.P., for making false and misleading statements concerning risk management practices relating to a fund, and his educational background to investors and prospective investors. Sanaullah was barred. https://www.sec.gov/files/litigation/admin/2025/ia-6850.pdf
10. On February 5, 2025, the SEC obtained a final judgment against Steven Susoeff, the owner and principal of Steve Susoeff, LLC (dba Meritage Financial Group), a now defunct state-registered investment adviser, for consistently allocating losing trades to his disfavored clients’ accounts. Susoeff was ordered to pay disgorgement of $54,232, prejudgment interest of $11,695 and a civil money penalty of $144,566. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26239
11. On February 4, 2025, the SEC instituted administrative proceedings against Thoroughbred Financial Services, LLC (“TFS”), a registered investment adviser and broker-dealer, Thomas Parker, and Lawrence Hartley, for breaches of fiduciary duty and inadequate disclosures. Parker and Hartley in connection with their mutual fund share class selection practices as well as misleading statements and omissions they made upon revising TFS’s practices after an examination. TFS, Parker and Hartley invested, recommended or held certain advisory client assets in mutual fund share classes that paid fees pursuant to Rule 12b-1 under the Investment Company Act of 1940 (“12b-1 fees”) instead of available, lower-cost share classes of the same funds without 12b-1 fees. TFS (as a broker-dealer) and Parker and Hartley received the 12b-1 fees based on these investments. These practices created a conflict of interest, were contrary to the disclosures regarding TFS’s Code of Ethics and were not disclosed adequately to firm clients in TFS’s Forms ADV or otherwise. TFS, Parker and Hartley also breached their duty to seek best execution for their clients by investing them in mutual fund share classes with 12b-1 fees rather than lower-cost share classes of the same funds. TFS was ordered to pay disgorgement of $740,250, prejudgment interest of $108,368 and a civil money penalty of $260,000. Parker was ordered to pay disgorgement of $217,883, prejudgment interest of $31,750 and a civil money penalty of $75,000. Hartley was ordered to pay disgorgement of $158,032, prejudgment interest of $22,957 and a civil money penalty of $65,000. https://www.sec.gov/files/litigation/admin/2025/34-102369.pdf
12. On February 4, 2025, the SEC announced Acting Chairman Mark T. Uyeda’s executive staff, which will advise the Acting Chairman on matters before the Commission Noteworthy, Acting Chairman Uyeda announced additional senior officer appointments including Antonia Apps, Acting Deputy Director for the Division of Enforcement. https://www.sec.gov/newsroom/press-releases/2025-36