Securities and Exchange Commission
SEC Obtains Judgment Against Former Chief Compliance Officer of Investment Adviser
Litigation Release No. 24736 / February 11, 2020
Securities and Exchange Commission v. The Nutmeg Group LLC, Randall Goulding, and David Goulding, Civil Action No. 09-cv-1775 (N.D. Ill., filed March 23, 2009)
An Illinois federal court entered a final judgment on January 30, 2020 against David Goulding, the former Chief Compliance Officer of The Nutmeg Group, LLC, a registered investment adviser that the SEC previously charged with fraud for misappropriating client assets and misrepresenting the value of fifteen investment pools.
In an order issued on January 21, 2020, the court found that Goulding aided and abetted Nutmeg's violations of the Investment Advisers Act of 1940. The court found that Goulding helped Nutmeg commingle investor funds with personal assets, misled investors about the value of their investments, oversaw flawed internal systems and methods for valuing and reporting investments, and transferred investor money to companies controlled by his family. The court also found that Goulding acted recklessly by taking on his compliance role despite "his complete lack of qualifications for that job." Goulding - who earlier was enjoined from violating the antifraud provisions of Sections 204, 206(1), 206(2), and 206(4) of the Advisers Act - is ordered to pay a total of $28,935 in disgorgement and prejudgment interest. The SEC previously barred Goulding from associating with any registered investment adviser.
The court also entered a final judgment on January 30, 2020 against two companies owned by Goulding - David Goulding, Inc. and David Samuel, LLC - for receiving ill-gotten gains derived from misconduct by Goulding and his father, Randall Goulding.
The litigation was handled by Andrew Shoenthal, Robert M. Moye, and Benjamin J. Hanauer of the Chicago Regional Office with assistance of Sheila Meaders and Sara L. Renardo. The investigation that led to the SEC's action was conducted by Mr. Shoenthal and Ann Tushaus of the Chicago Regional Office and was supervised by Paul A. Montoya.