SEC Charges Investment Adviser and Its Manager with Fraud in Connection with Unregistered Offering

ADMINISTRATIVE PROCEEDING
File No. 3-20243

March 15, 2021 - The Securities and Exchange Commission today charged Ettro Capital Management Corp. (ECM) - an investment advisor and real estate development firm - and its founder and manager, Peter Ettro, with making materially false and misleading statements in connection with an unregistered offer and sale of membership units in a real estate fund.

According to the SEC's order, ECM and Ettro raised approximately $4.4 million in an unregistered, non-exempt offering of membership interests in a fund managed by ECM and Ettro, which they used to invest in real estate that would be developed by ECM. The order finds that Ettro and ECM disseminated marketing materials to potential investors that materially misrepresented (1) the past performance of the fund; (2) capital raised and assets under management; and (3) ECM's investment management and real estate development experience.

The SEC's order finds that ECM and Ettro willfully violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Sections 5(a) and 5(c) of the Securities Act. Without admitting or denying the SEC's findings, ECM and Ettro consented to a cease-and-desist order, to pay a penalty of $60,000, and to provide notice of the SEC's order to all investors in the fund. Peter Ettro also consented to a permanent collateral bar and an investment company prohibition.

The SEC's investigation was conducted by Jonathan Austin and Elizabeth Doisy, and was supervised by Deborah A. Tarasevich and Jennifer Leete. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.