SEC Obtains Final Judgment Against Michigan Investment Adviser for Fraud
Litigation Release No. 25388 / May 9, 2022
Securities and Exchange Commission v. Steven F. Muntin, No. 5:21-cv-12607 (E.D. Mich. Southern Div. filed November 5, 2021)
On May 5, 2022, the U.S. District Court for the Eastern District of Michigan entered a final judgment against Steven F. Muntin, a former Michigan-based investment adviser representative at an SEC-registered investment adviser, for defrauding one of his investment advisory clients out of more than $314,000.
According to the SEC's complaint, while working for the registered investment adviser, Muntin also managed certain investments for his clients through his own company, Executive Asset Management, Inc., which was previously registered as an investment adviser with the state of Michigan. As alleged in the complaint, between March 2016 and February 2020, Muntin solicited one of his elderly advisory clients to write checks totaling $305,750 to Executive Asset Management for purported investments in securities. However, according to the complaint, Muntin did not invest the client's money in securities, and instead spent it for his own benefit, including paying his mortgage, real estate taxes, health insurance, boat and car loans, and credit card bills. The complaint further alleged that Muntin also overcharged the client at least $9,000 in assets under management fees.
Without admitting or denying the SEC's allegations, Muntin consented to the entry of a judgment that permanently enjoins him from 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) and 206(2) of the Investment Advisers Act of 1940 and orders him to pay disgorgement of $314,799 plus prejudgment interest of $46,121, and a civil penalty of $258,557.
The SEC's investigation was conducted by James A. Davidson and Jonathon Grobelski and supervised by Anne C. McKinley and Daniel J. Hayes of the Chicago Regional Office.