SEC Charges Investment Adviser and Two Former Managers for Misleading Retail Clients
Litigation Release No. 24157 / June 5, 2018
Securities and Exchange Commission v. Alderson, et al., Civil Action No. 1:18-cv-04930 (S.D.N.Y. filed June 4, 2018)
The Securities and Exchange Commission has charged two former managers of SEC-registered investment adviser deVere USA, Inc. for allegedly making misleading statements and omissions concerning economic conflicts of interest and other issues.
The SEC's complaint, filed in federal district court in Manhattan, alleges that former deVere USA CEO, Benjamin Alderson, and a former manager, Bradley Hamilton, misled clients and prospective clients about the benefits of pension transfers while concealing material conflicts of interest, including the substantial compensation that Alderson and Hamilton personally stood to receive.
The SEC's complaint charges Alderson and Hamilton with violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act"). The complaint also charges Alderson with aiding and abetting violations of Sections 204, 206(4) and 207 of the Advisers Act and Rules 204-2 and 206(4)-7 thereunder, and seeks an injunction, disgorgement plus interest, and civil money penalties.
The SEC separately instituted a settled administrative proceeding against deVere USA. According to the SEC order, deVere USA failed to disclose agreements with overseas product and service providers that resulted in compensation being paid to deVere USA advisers and an overseas affiliate. The SEC order also finds that deVere USA made materially misleading statements concerning tax treatment and available investment options. Without admitting or denying the SEC's findings, deVere USA consented to the SEC's order, which finds that the firm violated Sections 206(1), 206(2), 207, and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, and imposes a censure, cease-and-desist order, $8,000,000 civil penalty, and compliance with certain undertakings.
The SEC's investigation was conducted by Michael Ellis, Haimavathi Marlier and Wendy Tepperman in the New York office. Assisting the investigation was Roseann Daniello in the New York office. The litigation against Alderson and Hamilton will be led by Ms. Marlier and Mr. Ellis, and the case is being supervised by Lara Shalov Mehraban. The SEC examination that led to the investigation was conducted by Michael Devine, Phillip Ma, Edward Perkins, and Joseph DiMaria of the New York office. The SEC appreciates the assistance of the United Kingdom's Financial Conduct Authority.