SEC Charges Investment Adviser and CEO With Misleading Retail Investors
FOR IMMEDIATE RELEASE
Washington D.C., July 18, 2018 —
The Securities and Exchange Commission today charged a Connecticut-based investment advisory firm and its chief executive officer with putting $19 million of investor money, including elderly investors’ retirement savings and pension plans, in risky investments and secretly pocketing hefty commissions from those investments.
The SEC’s complaint alleges that Temenos Advisory Inc. and George L. Taylor steered advisory clients and other investors, including senior citizens and individuals approaching retirement, into four risky, illiquid private offerings. While Temenos and Taylor charged advisory fees for unbiased financial advice, they allegedly concealed from their clients the high commissions they were pocketing from these risky and unsuitable investment recommendations, including cash and ownership stakes in the private companies they recommended, and fraudulently misled clients about the risks and prospects of the investments. The SEC also alleges that Temenos and Taylor grossly overbilled some of their advisory clients.
“Investment advisers must put clients’ interests ahead of their own,” said Paul Levenson, Director of the SEC’s Boston Regional Office. “Temenos violated that duty by placing clients in risky private placements while downplaying the risk of those investments and concealing the financial conflicts that motivated the recommendations.”
The SEC’s complaint, filed in federal court in Connecticut, charges the defendants with violating the anti-fraud and registration provisions of the federal securities laws. The SEC is seeking disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctions.
The case is being handled by Dawn Edick, Marc Jones, Rua Kelly, Patrick Noone, and Amy Gwiazda. The SEC examination that led to the investigation was conducted by Maria Viana, Kenneth Leung, and Mayeti Gametchu of the Boston office.