SEC Charges Investment Adviser for Custody Rule Violations

ADMINISTRATIVE PROCEEDING
File No. 3-22101

September 9, 2024 - The Securities and Exchange Commission today announced settled charges against former registered investment adviser Farnham Fisher Collins d/b/a Collins Capital Management for failing to obtain verification by an independent public accountant of client funds and securities of which it had custody.

According to the SEC's order, from at least 2012 through 2023, Collins Capital failed to obtain annual surprise examinations by an independent public accountant, required by the Custody Rule, verifying client funds and securities in the accounts of two trusts for which Collins served as a co-trustee and an investment adviser. The SEC's order further finds that Collins Capital failed to adopt and implement written policies and procedures reasonably designed to prevent these violations.

The SEC's order finds that, based on the foregoing, Collins Capital willfully violated Section 206(4) of the Investment Advisers Act of 1940 and Rules 206(4)-2, and 206(4)-7 thereunder. Without admitting or denying the findings, Collins Capital consented to a cease-and-desist order and a censure and agreed to pay a $65,000 penalty.

The SEC's investigation was conducted by Eric Taffet and Rebecca Reilly and was supervised by Thomas P. Smith, Jr., all of the New York Regional Office. The examination that led to the investigation was conducted by Emanuel Asmar, Shari Singh, Rachel Lavery, and Arjuman Sultana.