Court Enters Final Judgment Against Investment Adviser COO

Litigation Release No. 25395 / May 17, 2022

Securities and Exchange Commission v. Richard T. Diver, No. 19-cv-02771 (S.D.N.Y. filed Mar. 28, 2019)

On April 26, 2022, the United States District Court for the Southern District of New York entered a final judgment against Richard T. Diver, the former chief operating officer (COO) of an investment adviser.

According to the SEC's complaint, filed in March 2019, Diver stole approximately $6 million from his employer, an investment adviser registered with the Commission. As alleged in the complaint, between 2011 and 2018, Diver, whose duties as the company's COO included managing the company's payroll and client billing, inflated his own pay by approximately $600,000 per year. According to the complaint, Diver misused his position as COO to cause the company to overbill its clients to generate additional revenue so that he could continue financing his inflated salary. As set forth in the complaint, during the course of his fraudulent scheme, Diver caused the company to overbill its clients by approximately $750,000 from over 300 investment advisory client accounts.

The final judgment against Diver permanently enjoined from future violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Diver was also held liable for disgorgement of $734,558, representing profits gained as a result of the conduct alleged in the complaint, plus prejudgment interest in the amount of $70,618.53, for a total of $805,176.53, which was deemed satisfied by the criminal restitution and forfeiture order entered against Diver in United States v. Richard Diver, 19-cr-533 (S.D.N.Y.).