SEC Charges Investment Adviser and CEO with Misleading Retail Investors
Litigation Release No. 24206 / July 18, 2018
Securities and Exchange Commission v. Temenos Advisory, Inc., and George L. Taylor, No. 3:18-cv-01180 (D. Conn. filed July 18, 2018)
The Securities and Exchange Commission today charged a Connecticut investment advisory firm and its chief executive officer with putting $19 million of investor money, including elderly investors' retirement savings and pension plans, in risky investments and secretly pocketing hefty commissions from those investments.
The SEC's complaint alleges that Temenos Advisory, Inc. and George L. Taylor steered advisory clients and other investors, including senior citizens and individuals approaching retirement, into four risky, illiquid private offerings. While Temenos and Taylor charged advisory fees for unbiased financial advice, they allegedly concealed from their clients the high commissions they were pocketing from these risky and unsuitable investment recommendations, including cash and ownership stakes in the private companies they recommended, and fraudulently misled clients about the risks and prospects of the investments. The SEC also alleges that Temenos and Taylor grossly overbilled some of their advisory clients.
The SEC's complaint, filed in U.S. District Court in the District of Connecticut, charges Temenos and Taylor with violating Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder, and Section 15(a) of the Securities Exchange Act of 1934. The SEC seeks disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctions.
The case is being handled by Dawn Edick, Marc Jones, Rua Kelly, Patrick Noone, and Amy Gwiazda. The SEC examination that led to the investigation was conducted by Maria Viana, Kenneth Leung, and Mayeti Gametchu of the Boston office.