From: RegTech Analyst
The Securities and Exchange Commission has filed an emergency action against Florida-based investment adviser Coral Gables Asset Management because of an alleged fraudulent offering.
The action follows after a U.S. District Court granted the SEC’s request for emergency relief, including an asset freeze and an order for records preservation against the Coral Gables Asset Management’s sole owner as well as two entities charged by the SEC as relief defendants.
The SEC is accusing the company of having solicited investors for a private fund they managed by misrepresenting the fund’s past performance, the amount of assets they were managing, and the owner’s experience as a portfolio manager.
The regulator said that Coral Gables Asset Management had shown investors and potential investors a document apparently demonstrating 37 months of positive monthly performance when it had had 26 months of negative performance during that period.
Moreover, the SEC also alleged that the owners had falsified brokerage records and investor account statements and created and sent fake audit opinions to investors and third parties.
The SEC also accused the sole owner of having destroyed evidence of his alleged misconduct after being told by the regulator to preserve documents. Furthermore, the SEC claimed he had misappropriated investor funds for personal use, including a luxury vehicle and travel.
“As we allege, Coggins drew in investors by suggesting that he was an experienced manager with a highly successful private fund and then took elaborate steps to conceal the truth of his fraud, including destroying evidence after being contacted by the SEC,” said Kurt L. Gottschall, director of the SEC’s Denver regional office. “The SEC’s emergency action is intended to protect prospective investors from future harm by halting what we allege is an ongoing fraud and preserving the remaining evidence.”
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, charges the owner with violating antifraud provisions of the federal securities laws.
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