Investment Advisor Allegedly Overcharged Clients $367K in Advisory Fees
The US Securities and Exchange Commission (SEC) has filed investor fraud charges against investment adviser Stephen Brandon Anderson, accusing him of defrauding clients and overcharging them at least $367K in advisory fees. Anderson ran River Source Wealth Management, LLC. The formerly registered investment advisory firm (RIA) is no longer in operation.
However, while in business, said the SEC, the RIA’s main income source was customer advisory fees. The fees were determined according to the assets under management of each customer.
According to the SEC order, Anderson overcharged most of his clients in 2015 and 2016, resulting in an aggregate of about 40% more charged than the maximum fees that had been agreed upon, totalling at least $367K.
The regulator is accusing Anderson of misleading clients about why he moved their assets from a “long-time asset custodian,” describing the move as “amicable,” when, in truth, the asset custodian terminated the relationship after identifying “irregular” billing practices. The North Carolina-based investment adviser also allegedly made material misstatements in reports submitted to the SEC, including overstating the RIA’s assets under management in 2015 by at least $34M and in 2016 by at least $61M.
Now, Anderson is barred from acting in a compliance or a supervisory role and from charging advisory fees unless supervised for at least three years. Without denying or admitting to the regulator’s findings, he will pay more than $405K of disgorgement plus prejudgment interest in addition to a $100K penalty.
More Parties Accused in $30M Investor Fraud
Core Agents Ltd. and its operator Savraj Gata-Aura are two more parties accused in an alleged $30M investor scam that involved the selling of fraudulent investments in Bar Works, 7th Avenue, and Bar Works, Inc., which are both co-working spaces. Gata-Aura and Core Agents are accused of aiding and abetting the scam.
Gata-Aura, who resides in New York, is accused of recruiting sales agents to sell the fraudulent investments and using offering materials that were false and misleading, including those that named Jonathan Black as the supposed CEO, when, in fact, he is not a real person. The Commission contends that the Bar Works companies were actually operated by a man named Renwick Haddow, whom the UK Financial Conduct Authority had sued in the past over a different investment scam.
After allegedly raising more than $10M from at least 100 investors in the alleged fraud, Gata-Aura and Core Agents were purportedly paid at least $2.9M in commissions.
SEC Takes Action to Stop Alleged $80M Ponzi Scam
In an emergency action against New York-based residential and commercial real estate developer Robert C. Morgan, the SEC accused him and his entities Morgan Acquisitions and Morgan Mezzanine Fund Manager of running a Ponzi fraud scam, raising over $80M from investors. Now, the regulator wants injunctions, disgorgement of ill-gotten gains, civil penalties, and other relief.
According to the Commission’s complaint, one way that Morgan paid for his development projects was to sell securities to over 200 retail investors, many of whom used their retirement funds. Investors were purportedly told that their funds would go toward enhancing multifamily properties. Instead, they were allegedly used to operate a Ponzi fraud, including to make payments to earlier investors and the improper use of over $11M in investor monies to pay back a loan that had been inflated and was fraudulently obtained.
Throughout the US, our investor lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) has represented thousands of investors in recouping losses caused by negligence, fraud, or other misconduct. We offer free, initial, no obligation case consultations to help you determine whether you have grounds for an investor fraud claim.