A Maryland financial advisor and financial radio show host has been charged with overstating her firm’s assets under management by at least $1.5 billion to make her company look more important than it was, the Securities and Exchange Commission charged Wednesday.
Dawn J. Bennett and her firm, the Bennett Group Financial Services LLC, both of Chevy Chase, Md., have been charged with lying about the assets to the public and then trying to obstruct the SEC’s investigation, the civil complaint says. They are also charged with overstating investors’ returns.
Bennett is the host of the conservative Radio America network financial show, Financial Myth Busting, where she interviews politicians and financiers. She lied about her company and its assets on the show, the SEC says.
Bennett is also a former contributor to Financial Advisor's Portfolio Manager Insights column. She was also a CNBC regular.
Contacted by phone, Bennett said she did not inflate assets and asserted that no one has been hurt by any action by her firm. Bennett added that she and her firm will vigorously defend themselves against the accusations.
“The SEC's ‘broken windows’ policy means the small guys are being prosecuted and it is sad,” Bennett said.
'Broken windows' refers to a SEC policy of prosecuting smaller offenses to let offenders know the agency is serious about crime. It is based on law enforcement policies adopted by New York City police in the 1990s.
For its part in the current case, the SEC has ordered an administrative hearing on the charges. A cease and desist order against any further violations has been ordered pending the hearing outcome.
From 2009 to 2011, Bennett and the Bennett Group “grossly overstated the assets they managed by $1.5 billion in a calculated effort to inflate their profile and prestige,” the complaint says. They also falsely stated that they managed another $1.5 billion for three corporate firms when it was actually $407 million, the SEC says.
She also claimed her firm was in the top 1 percent of firms nationwide for returns, when she was actually quoting a model portfolio return, not her clients’ actual returns, the complaint says.