Recently, two investment advisory firms settled claims with the SEC on charges that they impeded SEC staff examinations. In the case In re EM Capital Management, LLC, SEC, Admin. Proc. File No. 3-15101, 11/20/12, the SEC alleged that the firm and a principal delayed in producing books and records, including financial statements, emails, and other documents related to the firm’s mutual fund advisory business for nearly a year and half. In the case In re Barthelemy, SEC, Admin. Proc. File No. 3-15102, 11/20/12, the SEC asserted that the firm and its owner/manager misled staff examiners by inflating the firm’s claimed assets under management in an apparent attempt to show that the firm was eligible for SEC registration.
Both firms settled the allegations without admitting or denying wrongdoing and agreed to cease and desist from future violations, among other sanctions including monetary fines.