Brite Advisors USA, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26329 / June 17, 2025

Securities and Exchange Commission v. Brite Advisors USA, Inc., No. 1:23-cv-10212 (S.D.N.Y. filed Nov. 21, 2023)

SEC Obtains Final Judgment Against Investment Adviser for Custody Rule and Disclosure Violations

On June 4, 2025, the Securities and Exchange Commission obtained a final judgment by consent against New York-based investment adviser Brite Advisors USA, Inc. (“Brite USA”). In November 2023, the Commission charged Brite USA with failing to comply with Commission requirements for the safekeeping of client assets and for failing to disclose material risks and conflicts of interest associated with Brite USA’s recommendations to clients to use a related firm in Australia as a custodian.

The SEC's complaint,filed in the United States District Court for the Southern District of New York, alleged that Brite USA advised onnearly $400 million of client assets maintained by Brite Advisors Pty Ltd. (“Brite Australia”), an Australian financial services company under common control with Brite USA. The complaint alleged that since 2019, Brite USA failed to comply with the custody rule requirement that it obtain an internal control report as to the safeguarding of client funds and securities maintained by Brite Australia. In addition, the complaint alleged that Brite USA breached its fiduciary duties to its clients by failing to fully disclose conflicts of interest and risks to client assets resulting from Brite Australia’s borrowing of millions of dollars using Brite USA’s client assets as collateral to provide operational funding to Brite USA and other related companies.

Brite USA consented to the entry of a final judgment, without admitting or denying the allegations in the complaint, that permanently enjoins it from violating Section 206(2) of the Investment Advisers Act of 1940 and Rule 206(4)-2 thereunder, and imposes a conduct-based injunction that permanently enjoins it from acting as an investment adviser.

The SEC’s litigation was handled by Travis Hill, Jonathan Grant, and Wendy Tepperman, and was supervised by Sheldon L. Pollock of the SEC’s New York Regional Office.