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Another Conflict of Interest Enforcement Action Taken by the SEC Against a Registered Adviser




by:
Peter D. Fetzer
Jason M. Hille
Foley & Lardner LLP - Milwaukee Office

Terry D. Nelson
Foley & Lardner LLP - Madison Office

 
September 2, 2014

Previously published on August 29, 2014

The president of a registered investment advisory firm, Jason D. Huntley, agreed to, among other things, a five-year bar from association with any investment adviser, broker, dealer, municipal securities dealer or transfer agent, for violations of the “anti-fraud” provisions under the Investment Advisers Act of 1940.

The violations cited by the SEC against Huntley were in the form of failing to disclose certain conflicts of interest to clients as the president of an advisory firm registered under the Advisers Act. On one such occasion, Huntley failed to inform investors in his managed private fund that fund assets were being used to provide loans to one or more of his related entities. On another occasion, Huntley failed to inform his clients that he would receive a finder’s fee in connection with introducing the adviser of another fund to representatives of a publicly traded special purpose acquisition company. Although Huntley asked the investors to provide written consent to the transaction, as required, he omitted the fact that he would personally gain from the transaction through the receipt of a finder’s fee for arranging the transaction.

In order to settle the SEC enforcement action, Huntley, without admitting or denying the charges, agreed to the five-year bar, the issuance of a cease-and-desist order, the prohibition of serving or acting as an employee, officer or director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or for an affiliated person of any of such entities, and pay a civil penalty of $100,000.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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