The Securities and Exchange Commission today announced that it has filed an emergency action against Florida-based investment adviser Coral Gables Asset Management LLC and its sole owner, David C. Coggins, in connection with an alleged fraudulent offering. On August 20, 2020, U.S. District Court Judge Kathleen M. Williams granted the SEC's request for emergency relief, including an asset freeze and an order for records preservation, against Coggins and Coral Gables, as well as two entities charged by the SEC as relief defendants.

According to the SEC's complaint, Coral Gables and Coggins solicited investors for a private fund they managed by misrepresenting the fund's past performance, the amount of assets they were managing, and Coggins' experience as a portfolio manager. For example, the complaint alleges that one document Coggins provided to investors and potential investors showed 37 months of positive monthly performance even though, in reality, in approximately 26 months during the specified timeframe the Fund had negative performance. The complaint further alleges that Coral Gables and Coggins falsified brokerage records and investor account statements and created and sent fake audit opinions to investors and third parties. As alleged, within hours of receiving a request from the SEC to preserve documents, Coggins destroyed evidence related to his fraudulent conduct. According to the complaint, Coggins misappropriated investor funds for personal use, including a luxury vehicle and travel.

The SEC's complaint, filed in the U.S. District Court for the Southern District of Florida, charges Coral Gables and Coggins with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The SEC's complaint also charges Coggins, in the alternative, with aiding and abetting Coral Gables' violations of the Advisers Act. The SEC seeks injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, and financial penalties against the defendants. The SEC also charged Coral Gables Asset Holdings, L.P. and its successor entity, Coral Gables Capital, L.P., as relief defendants.

The SEC's investigation, which is continuing, is being conducted by Jeffrey D. Felder and Tracy W. Bowen in the Denver Regional Office and supervised by Kimberly L. Frederick, Jason J. Burt, and Kurt L. Gottschall. The SEC's litigation is being led by Zachary T. Carlyle and Christopher E. Martin, under the supervision of Gregory A. Kasper.