SEC Charges Cape Cod-Based Investment Adviser with Fraud
Litigation Release No. 24208 / July 19, 2018
Securities and Exchange Commission v. Kimberly Pine Kitts, No. 1:18-CV-11507 (D. Mass. filed July 19, 2018)
The Securities and Exchange Commission filed an enforcement action on July 19, 2018 in federal court in Boston, Massachusetts, charging Cape Cod-area investment adviser Kimberly Pine Kitts with defrauding multiple clients by stealing over three million dollars from their investment and retirement accounts.
According to the Commission's complaint, Kitts engaged in a six-year scheme to steal money from client accounts by forging client signatures on withdrawal requests from variable annuities, forging client signatures to wire funds from client brokerage accounts, and misleading clients into withdrawing funds to make fake tax payments. Kitts continued this practice until 2017 when a client questioned Kitts about the dwindling balance in her account. Through 82 unauthorized withdrawals, Kitts stole more than three million dollars from seven clients, and then tried to conceal her fraud through falsified account statements and other documentation. Kitts used the money she stole for personal expenses, including paying for vacations and several luxury vehicles.
The Commission's complaint alleges that Kitts violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, civil penalties, and disgorgement plus prejudgment interest against Kitts.
The Commission's case is being handled by Gretchen Lundgren, John McCann, and Michele T. Perillo of the Boston Regional Office, with assistance from Paul D'Amico, Mark Gera, and Andrew D. Caverly of the Office of Compliance, Inspections and Examinations in the Boston office, who conducted a related examination.