The SEC has accused a Washington-based firm of falsely claiming it manages $153 million in assets, and has won a court order requiring the firm to turn over its records.
The SEC says Jupiter Group Capital Advisors LLC of Kirkland, Wash., and its president, Rick Cho of Honolulu, falsely stated in the firm's Form ADV that it manages $153 million for 38 clients.
When SEC staff investigated, Cho refused requests for information and eventually claimed the filing referred to estimated future assets and that Jupiter Group has no client accounts, according to the SEC.
U.S. District Court Judge Leslie E. Kobayashi in Los Angeles issued a temporary restraining order on May 9 requiring the firm to produce the firm's books and records for examination and providing additional equitable relief.
"Cho and his firm attempted to subvert the SEC's examination and registration rules by registering with the SEC under false pretenses and then refusing to submit to an examination by SEC staff as required under law," said Rosalind R. Tyson, regional director of the SEC's Los Angeles Regional Office.
According to the SEC's complaint, Cho refused to provide evidence for his claim that the assets identified on Jupiter Group's March 2010 Form ADV filing belong to an unrelated business venture. He also failed to explain why the document originally filed in October 2009 was amended to show an increased number of clients and assets under management, when in reality there weren't any client accounts.
The SEC alleges that Jupiter Group did not manage $25 million or more of client assets for any reporting period, and therefore was not eligible for SEC registration. In addition, from December 2010 to the present, Jupiter Group and Cho have refused to submit to an examination.