On January 29, 2025, the SEC together with the CFTC, extended the compliance date for the amendments to Form PF that were adopted on Feb. 8, 2024. The compliance date for these amendments, which was originally March 12, 2025, has been extended to June 12, 2025. https://www.sec.gov/newsroom/press-releases/2025-33
On January 28, 2025, the SEC’s Office of Credit Ratings published its annual Staff Report on Nationally Recognized Statistical Rating Organizations (NRSROs) summarizing the findings of the NRSRO examinations and discussing the state of competition, transparency, and conflicts of interest among NRSROs. https://www.sec.gov/newsroom/press-releases/2025-32
On January 22, 2025, SEC instituted administrative proceedings against Christopher Kennedy, a registered representative at Western International Securities, Inc., a dually registered investment adviser and broker-dealer, for making false and misleading statements regarding the value and success of his trading strategy, and for sending falsified account statements to a customer. Kennedy recommended a short-term, high-volume investment strategy in nineteen retail customer brokerage accounts without a reasonable basis. As a result of the high volume of recommended transactions and the associated commissions, it would have been virtually impossible for retail customers to achieve a positive return in their brokerage accounts. Kennedy was barred. https://www.sec.gov/files/litigation/admin/2025/34-102268.pdf
On January 22, 2025, SEC instituted administrative proceedings against Donald Wright, Chief Executive Officer, and part owner of Retirement Specialty Group, a formerly registered investment adviser, for misused and misappropriated investor funds obtained from clients and at least one non-client through the fraudulent offer, recommendation, and sale of fraudulent promissory notes. Wright made material misrepresentations and omissions concerning the nature and safety of the investments, the planned use of proceeds, and his relationships with the issuers. Wright also failed to disclose multiple conflicts of interest. After defrauding his clients, Wright repeatedly misled them about the status of their investments and repayments. Wright was barred. https://www.sec.gov/files/litigation/admin/2025/ia-6833.pdf
On January 17, 2025, the NASAA announced that a taskforce of state securities regulators and the SEC has reached a $106 million settlement with Vanguard Marketing Corporation and The Vanguard Group, Inc (together, “Vanguard”) for failing to supervise certain registered persons and failing to disclose potential tax consequences to investors following a change in investment minimums for certain target date retirement funds. Vanguard lowered the investment minimums and fees for its Institutional Target Retirement Funds (“TRFs”). As a result of the lowered investment minimums, a large number of retirement investors redeemed their Investor TRF shares to purchase Institutional TRF shares. The large number of redemptions caused Vanguard to sell highly appreciated assets in the Investor TRF, which resulted in significant capital gains taxes for hundreds of thousands of retail investors who remained invested in the Investor TRF. Vanguard did not disclose potential capital gains and tax consequences to Investor TRF shareholders that would result from this anticipated migration of shareholders from the Investor TRF to the Institutional TRF as a result of the lowering of the minimum investment for the Institutional TRFs. https://www.nasaa.org/74466/nasaa-announces-106-million-multi-state-settlement-with-vanguard/
On January 17, 2025, the SEC charged Joey Miller, Jeff Larson, and Randy Larson, formerly dually registered personnel with Arete Wealth Management LLC, a broker-dealer, and Arete Wealth Advisors LLC, an affiliated investment adviser, for fraud, registration violations, and aiding and abetting Arete Wealth Management’s recordkeeping violations. The SEC also charged Arete Wealth Advisors Chief Compliance Officer and General Counsel, UnBo (Bob) Chung, with various violations of the federal securities laws related to a coverup of the representatives’ allegedly fraudulent conduct and other compliance failures. This matter is being litigated. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26228
On January 17, 2025, the SEC instituted administrative proceedings against Transamerica Retirement Advisors, LLC (“TRA”), a registered investment adviser, for failing to disclose conflicts of interest created by paying incentive compensation to its investment advisor representatives in connection with the rollover of retirement assets to accounts with TRA. TRA paid incentive compensation to its retirement planning consultants for referring employer plan participants to its investment advisor representatives in its Transamerica Advice Center to consider whether to rollover plan assets into advisory accounts. Also TRA began paying incentive compensation to its TAC Advisors when those participants rolled over their assets into advisory accounts. TRA was ordered to pay a civil money penalty of $2,900,000. https://www.sec.gov/files/litigation/admin/2025/ia-6826.pdf
On January 17, 2025, the SEC charged Scott Mason, a formerly registered investment adviser, and his companies Rubicon Wealth Management LLC and Orchard Park Real Estate Holdings LLC, with misappropriating more than $20 million from at least 13 Rubicon advisory clients. Mason made unauthorized transfers of money from Rubicon clients’ accounts to his own accounts and those of his entities, Rubicon and Orchard Park. Mason used the money for his own purposes, including to pay country club dues, transfer it to other clients, and purchase a portion of a miniature golf course in New Jersey. Mason forged clients’ signatures, made numerous misrepresentations about what he was doing with clients’ money, and concealed his fraud for years by providing fake account statements and tax documents. This matter is being litigated. https://www.sec.gov/newsroom/press-releases/2025-20
On January 17, 2025, the SEC charged LPL Financial LLC, a dually registered investment adviser and broker-dealer, for multiple failures related to its anti-money laundering (AML) program. LPL experienced longstanding failures in its customer identification program, including a failure to timely close accounts for which it had not properly verified the customer’s identity. LPL failed to close or restrict thousands of high-risk accounts, such as cannabis-related and foreign accounts, that were prohibited under LPL’s AML policies. LPL was ordered to pay a civil money penalty of $18 million. https://www.sec.gov/newsroom/press-releases/2025-17
On January 17, 2025, the SEC charged 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. , with making and disseminating false and misleading statements to investors and prospective investors about the Fund’s risk management practices and his educational background. This matter is being litigated. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26227
On January 16, 2025, the SEC charged Two Sigma Investments LP and Two Sigma Advisers LP, registered investment advisers, for breaching their fiduciary duties by failing to reasonably address known vulnerabilities in their investment models and for related compliance and supervisory failures, as well as for separately violating the Commission’s whistleblower protection rule. Two Sigma failed to adopt and implement written policies and procedures to address them and failed to supervise one of its employees who made unauthorized changes to more than a dozen models, which resulted in Two Sigma making investment decisions that it otherwise would not have made on behalf of its clients. Two Sigma was ordered to pay a civil money penalty of $90 million. https://www.sec.gov/newsroom/press-releases/2025-15
On January 14, 2025, the SEC instituted administrative proceedings against Fortius Financial Advisors, LLC, a formerly registered investment adviser, Jeff Bollinger, Fortius’ founder and managing member and Gary Oliver, a former member of the firm, in managing the assets of certain trust entities for which Oliver also acted as a trustee, for misconduct. Fortius, Bollinger and Oliver invested more than $800,000 of the entities’ assets in unsuitable, illiquid investments which had an undisclosed financial interest. Oliver misappropriated approximately $137,000 from the trust entities’ accounts. Fortius and Bollinger failed reasonably to supervise Oliver and failed to comply with the requirements of the custody rule under the Advisers Act in light of Oliver’s full signatory authority over the trust entities’ accounts. Fortius and Bollinger also failed to adopt and implement policies and procedures reasonably designed to prevent violations of the Advisers Act and its rules, particularly as to Oliver’s misappropriation of client assets. Oliver also caused Fortius to make untrue statements in its registration application filed with the SEC. Fortius was ordered to pay disgorgement of $20,749, prejudgment interest of $3,321 and a civil money penalty of $70,000. Bollinger was ordered to pay disgorgement of $1,718, prejudgment interest of $252 and a civil money penalty of $25,000. Oliver was ordered to pay disgorgement of $138,436, prejudgment interest of $15,426 and a civil money penalty of $125,000. https://www.sec.gov/files/litigation/admin/2025/34-102189.pdf
On January 14, 2025, the SEC instituted administrative proceedings against VCP Financial LLC, a registered investment adviser, for failing to manage a conflict of interest in a manner consistent with its representations in its firm brochures. VCP Financial disclosed that it had a financial conflict of interest when recommending investments offered by private funds managed by an affiliated entity under common ownership and control with VCP Financial (the “Affiliated Manager”). VCP Financial disclosed that it would manage the conflict of interest by, among other things, reasonably ensuring all clients’ accounts were invested in accordance with client approved investment policy statements and adopting policies and procedures to reasonably ensure that investments and recommendations were in the best interest of clients. Rather than follow these described procedures, however, VCP Financial required its clients who invested in the funds managed by the Affiliated Manager to acknowledge that VCP Financial was disclaiming its role in their investment decision and that VCP Financial was not acting as their investment adviser in connection with their investment in those funds. These statements contradicted VCP Financial’s firm brochure and further could lead a client to believe incorrectly that the client had waived a nonwaivable cause of action against VCP Financial. VCP was ordered to pay a civil money penalty of $100,000. https://www.sec.gov/files/litigation/admin/2025/ia-6819.pdf
On January 14, 2025, the SEC charged Navy Capital Green Management, LLC, an exempt reporting adviser, with making misrepresentations related to its anti-money laundering (AML) procedures and for compliance failures. Navy Capital stated in offering and other documents provided to prospective and existing private fund investors that the firm was voluntarily complying with AML due diligence laws despite those laws not applying to investment advisers, including by conducting specific types of AML due diligence on prospective investors and conducting ongoing AML due diligence monitoring on existing investors. Navy Capital’s private fund investors included multiple foreign-based entities with opaque beneficial ownership and sources of wealth. Navy Capital was ordered to pay a civil money penalty of $150,000. https://www.sec.gov/newsroom/press-releases/2025-8
On January 13, 2025, the SEC instituted administrative proceedings against BMO Capital Markets Corp., a dually registered investment adviser and broker-dealer, for failing to supervise certain registered representatives with a view towards preventing and detecting their violations of the federal securities laws while offering and selling certain Agency Collateralized Mortgage Obligation Bonds (“Agency CMO Bonds”). CMC failed to establish and implement supervisory procedures reasonably designed to prevent and detect the Registered Representatives, subject to CMC’s supervision, from providing misleading information when offering and selling the bonds to customers. CMC was ordered to pay a civil money penalty of $19,000,000. https://www.sec.gov/files/litigation/admin/2025/34-102160.pdf
On January 13, 2025, the SEC charged nine investment advisers and three broker-dealers for failures by the firms and their personnel to maintain and preserve electronic communications, in violation of recordkeeping provisions of the federal securities laws. The firms admitted the facts set forth in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined civil penalties of $63.1 million, as outlined below, and have begun implementing improvements to their compliance policies and procedures to address these violations. One of the firms, as noted below, self-reported its violations and, as a result, will pay significantly lower civil penalties than it would have otherwise. https://www.sec.gov/newsroom/press-releases/2025-6
• Blackstone Alternative Credit Advisors LP, together with Blackstone Management Partners L.L.C. and Blackstone Real • Estate Advisors L.P., agreed to pay a combined $12 million penalty; • Kohlberg Kravis Roberts & Co. L.P. agreed to pay a $11 million penalty; • Charles Schwab & Co., Inc. agreed to pay a $10 million penalty; • Apollo Capital Management L.P. agreed to pay a $8.5 million penalty; • Carlyle Investment Management L.L.C., together with Carlyle Global Credit Investment Management L.L.C., and AlpInvest Partners B.V., agreed to pay a combined $8.5 million penalty; • TPG Capital Advisors LLC agreed to pay an $8.5 million penalty; • Santander US Capital Markets LLC agreed to pay a $4 million penalty; • PJT Partners LP, which self-reported, agreed to pay a $600,000 penalty.
On January 10, 2025, the SEC settled proceedings concerning breaches of fiduciary duties by an investment adviser, the One Thousand and One Voices Manager, and its relying adviser, the Family Legacy Manager, (collectively, the “Fund Managers”), as well as Jordaan, the Fund Managers’ Chief Executive Officer, Chief Compliance Officer, founder, and sole owner. The Fund Managers and Jordaan improperly charged certain expenses to its private funds and failed to disclose the resulting conflicts of interest whereby the Fund Managers were incentivized to charge the private funds for expenses rather than pay the expenses themselves. The private funds’ governing documents did not permit the Fund Managers to charge the private funds for these expenses, and the Fund Managers had historically paid many of these expenses. Additionally, from 2019 through at least 2022, the Fund Managers submitted invoices to the private funds without taking reasonable steps to confirm that the private funds should have paid such expenses. In addition, the Fund Managers failed to adopt and implement reasonably designed policies and procedures to prevent the misallocation of expenses or to identify and disclose conflicts of interest between the Fund Managers and the private funds. Accordingly, the Fund Managers also violated Section 206(4) of the Advisers Act and Rule 206(4)- 7 thereunder, and Jordaan caused those violations. One Thousand and One Voices Manager and Jordaan paid disgorgement of $1,522,572 and prejudgment interest of $272,222, for a total of $1,794,794. The One Thousand and One Voices Manager and Jordaan shall pay, jointly and severally, a civil money penalty of $150,000.
On January 10, 2025, the SEC instituted administrative proceedings against Touradji Capital Management LP, a formerly registered investment adviser and Paul Touradji, owner of Touradji Capital, for failing to withdraw its registration as an investment adviser notwithstanding the firm having less than $90 million in regulatory assets under management. Touradji Capital was censured and ordered to pay a civil money penalty of $15,000. https://www.sec.gov/files/litigation/admin/2025/ia-6810.pdf
On January 7, 2025, the SEC charged Leena Jaitley with operating two fraudulent websites, Managed Options Trading and Options by Pros, and offering to trade options on behalf of investors. To recruit clients, Jaitley falsely claimed that the websites employed experienced traders in New York who used a proprietary trading methodology with a history of success. In reality, Jaitley acted alone from Texas or with the assistance of her father. Jaitley’s misrepresentations led to at least fifteen individuals losing more than $800,000 in principle. Jaitley was ordered to pay disgorgement of $672,833, prejudgment interest of $158,835 and a civil money penalty of $672,833. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26212