🚨SEC Charges Investment Adviser and Officers for Misuse of Funds
The SEC has filed charges against Momentum Advisors LLC and its former officers for misusing funds and portfolio company assets. The accusations include misappropriating $223,000 for personal expenses and failing to supervise properly.
Key Points
- •📅 Timeline: Misconduct occurred from August 2021 to February 2024
- •💸 Misappropriated Funds: $223,000 used for vacations, clothing, and personal expenses
- •🚩 Breach of Duty: Officers failed to supervise and concealed their actions
- •⚖️ Penalties: $200,000 fine for Hawkins, $80,000 for Boomer, and $235,000 for Momentum Advisors
- •🕵️♂️ Investigators: SEC's New York Regional Office conducted the investigation
🔍 The Scoop
In a tale that feels ripped from a financial crime thriller, the SEC has slapped Momentum Advisors LLC and its former top brass, Allan J. Boomer and Tiffany L. Hawkins, with charges for a series of fiduciary breaches. From August 2021 to February 2024, Hawkins is alleged to have misappropriated a cool $223,000 from portfolio companies for her personal shopping sprees and vacations. All this, while Boomer turned a blind eye.
💸 The Money Trail
Hawkins reportedly went on over 100 joyrides with the company debit cards, paying for everything from vacations to new wardrobes. Not only did she misuse the funds, but she also sneaked extra compensation into her paycheck. Boomer, on his part, failed to supervise Hawkins adequately despite numerous red flags. To top it off, Boomer made the fund pay off a $346,904 debt that should have been covered by his own entity.
⚖️ The Fallout
When the dust settled, the SEC found that both Hawkins and Boomer had violated antifraud provisions. Momentum Advisors didn’t escape unscathed either, with the SEC noting failures in compliance and audit procedures. Hawkins agreed to a $200,000 penalty and a ban from associational activities, while Boomer got hit with an $80,000 fine and a 12-month supervisory suspension. Momentum Advisors is coughing up $235,000 and facing a censure.
🕵️♂️ The Investigators
Kudos to the eagle-eyed team at the SEC’s New York Regional Office. The investigation, led by Alexander M. Levine, James Flynn, and Steven G. Rawlings, uncovered the misconduct, thanks to a thorough examination by Emanuel S. Asmar, Majid S. Mahmood, and Arjuman Sultana. They left no stone unturned, ensuring that justice was served.