SEC Files Charges Against Bruderman Asset Management and Principal for Concealing Misuse of Investment Funds
From the desk of Jim Eccleston at Eccleston Law
The Securities and Exchange Commission (SEC) has announced that Bruderman Asset Management LLC (BAM), based in New York, and its principal, Matthew J. Bruderman, have agreed to settle charges stemming from their failure to disclose the misuse of proceeds obtained from investment advisory clients and their failure to establish adequately designed written policies and procedures related to conflict of interest disclosures.
As per the SEC's order, between February 2017 and August 2021, BAM and Bruderman advised at least 13 clients to invest at least $6.1 million in three companies in which Bruderman had substantial ownership interests and decision-making authority. The SEC's order asserts that BAM and Bruderman neglected to inform these clients that their investments would be temporarily diverted for other purposes, including funding BAM's payroll and repaying loans owed to Bruderman or affiliated companies. Additionally, BAM, under Bruderman's leadership, failed to implement adequately designed written policies and procedures for the disclosure of conflicts of interest.
BAM and Bruderman, without admitting or denying the SEC's findings, have agreed to cease and desist from engaging in or violating multiple provisions of the Investment Advisers Act of 1940. The order also imposes a censure and a civil penalty of $250,000.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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