Alaska RIAs to Pay Over $400,000 to Settle Charges Related to Recruiting Investors for Fraudulent Fund

Posted on August 7th, 2019 at 3:30 PM
Alaska RIAs to Pay Over $400,000 to Settle Charges Related to Recruiting Investors for Fraudulent Fund

Two Alaska-based registered investment advisors and their firm have agreed to pay more than $400,000 to settle charges related to their recruitment of investors for a real estate fund that was running a multi-million dollar fraud.

The Securities and Exchange Commission (“SEC”) charged Michael Shamburger and Rob Wedel, and their firm, Foundations Asset Management (FAM), with failing to disclose to clients that they substantially profited by luring the clients into the fund.

Specifically, from May 2013 to June 2016, the firm and its principals failed to disclose conflicts related to its recommending investments in Alaska Financial Company III LLC (AFC III), a private real estate investment. During the same period, FAM paid about $254,000 in exchange for the firm’s recommendations to its clients.

The compensation received from FAM was higher than the firm’s typical advisory fee. Shamburger and Wedel had provided a written disclosure to some clients invested in AFC III, but the SEC determined that the disclosure acknowledgment form did not adequately address the conflicts of interest.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, alaska, RIA, fraudulent fund

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