SEC Obtains Judgment Ordering Connecticut Investment Adviser and Its Former CEO to Pay Over $2 Million
Litigation Release No. 24845 / July 1, 2020
Securities and Exchange Commission v. Temenos Advisory, Inc., and George L. Taylor,
Case No. 3:18-cv-01180 (D. Conn. filed July 18, 2018)
The Securities and Exchange Commission announced today the entry of final judgments against Connecticut investment advisory firm Temenos Advisory, Inc. and its former chief executive officer, George Taylor.
The SEC charged Temenos and Taylor in July 2018 with putting $19 million of investor money, including elderly investors' retirement savings and pension plans, in four risky, illiquid private securities offerings without performing due diligence or disclosing the risks and prospects of the investments. The complaint also alleged that Temenos and Taylor significantly overbilled some of their advisory clients. The complaint further alleged that Temenos and Taylor also concealed from clients the high commissions they obtained from the issuers for selling those investments.
On June 30, 2020, the U.S, District Court for the District of Connecticut entered final judgments by consent against Temenos and Taylor. Pursuant to the final judgments, the defendants, without admitting or denying the allegations in the SEC's complaint, are permanently enjoined from violating the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, the policies and procedures provisions of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, and the broker registration provisions of Section 15(a) of the Securities Exchange Act of 1934. Temenos is ordered to pay $768,137 in disgorgement, prejudgment interest of $56,706, and a civil penalty of $775,000. Taylor is ordered to pay $321,956 in disgorgement, prejudgment interest of $22,358, and a civil penalty of $179,618.
The SEC's case was handled by Dawn Edick, Marc Jones, Rua Kelly, and Amy Gwiazda. The SEC examination that led to the investigation was conducted by Maria Viana and Kenneth Leung of the Boston office.