U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19534 / January 20, 2006
Securities and Exchange Commission v. Groh Asset Management, Inc. and Roger O. Groh, United States District Court for the Northern District of California, Civil Action No. 06-00346 (MMC)
On January 19, 2006, the Securities and Exchange Commission filed a civil action against Groh Asset Management, Inc. ("GAM") and Roger O. Groh seeking federal-court enforcement of the Commission's order that they pay a civil penalty and that GAM comply with certain undertakings relating to its investment advisory business.
According to the complaint, the Commission previously instituted an administrative proceeding against GAM and Groh, finding that they fraudulently overstated GAM's assets under management to third parties and failed to keep certain books and records in violation of the Investment Advisers Act of 1940 (the "Advisers Act"). Without admitting or denying the findings, GAM and Groh agreed to settle the matter by consenting to an order requiring, among other things, that they pay a $45,000 civil penalty and that GAM perform certain remedial measures, including retaining an independent consultant for five years to review its advertising and marketing materials as well as its and books and records. On September 30, 2004, the Commission issued an order imposing such sanctions. GAM and Groh, however, have violated the order by, among other things, failing to pay any part of the civil penalty and by allowing the independent consultant retained by GAM to resign.
The Commission's complaint, filed pursuant to Section 209(d) of the Advisers Act, asks a federal court to order GAM and Groh to comply with the Commission's order, pay the civil penalty, and comply with the mandated undertakings.
