SEC Charges Recidivist Investment Adviser with Fraud and Seeks Enforcement of a Commission Order
Litigation Release No. 24773 / March 19, 2020
Securities and Exchange Commission v. Brandon E. Copeland and E.B. & Copeland Capital, Inc., No. 1:20-cv-00589 (N.D. Ohio filed March 18, 2020)
The Securities and Exchange Commission announced charges against recidivist Brandon E. Copeland for violating a Commission order and, together with his investment adviser firm, E.B. & Copeland Capital, Inc., deceiving potential investors in a pooled investment vehicle.
In July 2019, the Commission instituted a settled order against Copeland for making false and misleading statements to investors in Form ADV filings and offering materials. The Commission's order found that Copeland willfully violated the antifraud provisions of the Investment Advisers Act of 1940, and willfully aided and abetted or caused violations of the registration provisions of the Advisers Act. The order further imposed against Copeland a cease-and-desist order, a collateral bar, and an investment company prohibition, and a $25,000 penalty.
According to the SEC's complaint, filed in U.S. District Court for the Northern District of Ohio, Copeland immediately violated the Commission's order and, together with Copeland Capital, committed new violations of the Advisers Act. Copeland allegedly established a new investment adviser and private fund shortly before the Commission's order was instituted. After the order was instituted, Copeland and Copeland Capital promoted themselves and their private fund on a public website that contained numerous misstatements and omissions regarding the status and success of the private fund, as well as Copeland's industry experience and disciplinary history with the Commission.
The complaint charges Copeland with willfully violating Section 203(f) of the Advisers Act by associating with an investment adviser in violation of the bar in the Commission Order, violating his cease-and-desist order, and failing to pay the ordered $25,000 civil penalty. Based upon the solicitation for the new private fund, the complaint also charges Copeland and Copeland Capital with violating the antifraud provisions of Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, and, in the alternative, charges Copeland with aiding and abetting Copeland Capital's violations of those provisions. The complaint seeks to enforce the Commission's order against Copeland and to obtain an injunction, civil penalties, and disgorgement of ill-gotten gains with prejudgment interest from Copeland and Copeland Capital.
The SEC's investigation was conducted by Jennifer R. Turner and was supervised by Mary S. Brady and Jason J. Burt of the SEC's Denver office. The litigation will be led by Leslie J. Hughes and supervised by Gregory A. Kasper.