SEC Settles Charges Against Utah-Based Investment Adviser for Material Misstatements to Investors
Sept. 24, 2019
File No. 3-19509
September 24, 2019 - The Securities and Exchange Commission today announced settled charges against a Utah-based investment adviser for making materially false statements to investors and prospective investors in a pooled investment vehicle the adviser managed.
According to the SEC's order, from November 2014 through October 2016, Scott Huish induced 19 investors to invest over $2.5 million in his pooled investment vehicle with the promise of high returns to be generated by Huish's management of numerous private equity funds. Among other misrepresentations, the order finds Huish told investors and prospective investors that the funds had hundreds of millions of dollars in committed capital, had an exclusive right to all deal flow from an international law firm with thousands of attorneys, and that the investment adviser he controlled had approximately $1 billion in assets under management. In truth, the order finds each of these statements was false, and Huish's failed management of the investment adviser resulted in 100 percent investor losses. The order further finds that Huish willfully and materially misstated the investment adviser's regulatory assets under management in Forms ADV filed with the SEC.
The order finds that Huish willfully violated the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The order also finds that Huish willfully violated Section 207 of the Advisers Act and aided and abetted and caused violations of Section 203A of the Advisers Act. Huish consented, without admitting or denying the order's findings, to the entry of a cease-and-desist order, associational and investment company bars, and a $160,000 penalty.
The SEC's investigation was conducted by Adam S. Ross of the SEC's Denver Regional Office, with assistance from Chris Martin, and was supervised by Mary S. Brady. The SEC examination that led to the investigation was conducted by Stephanie M. Fischer-Bennett and supervised by Heather Clark and Denise S. Saxon.