The Securities and Exchange Commission charged 38 entities with using false filings to try to appear they were legitimate U.S. advisors in an attempt to lure retail investors.
In a press release detailing the allegations, the SEC stated that the entities made material misrepresentations in Forms ADV filed with the commission between 2025 and 2026 to falsely portray themselves as legitimate advisory firms to U.S. investors.
The defendants also allegedly failed to respond to requests by the SEC counsel to provide records to substantiate information on their Forms ADV. A number of them used IP addresses that were tracked to foreign jurisdictions to connect to the commission’s filing system, the SEC said.
“Our complaints allege large-scale abuse of SEC adviser filings by persons, several of whom are likely located overseas, exploiting interest in emerging technologies,” said Laura D’Allaird, Chief of the SEC Enforcement Division’s Cyber and Emerging Technologies Unit. “When we find bad actors using fraudulent SEC filings to feign legitimacy with retail investors, we will act decisively to disrupt these operations.”
According to the complaints filed in the United States District Court for the District of Colorado, the defendants made material misrepresentations and statements that could not be substantiated in Forms ADV filings, including listing places of business at addresses in Colorado where the defendants had no presence and providing phone numbers that are disconnected or belong to unrelated businesses.
“The SEC complaints also allege that the defendants disclosed an ownership structure and numerical data that was identical or nearly identical to a multitude of other purported exempt reporting advisers (ERA) and claimed that the financial statements of the private funds they purportedly advised had been audited by one of two independent public accounting firms, neither of which can be found in any public registry of federal or state accountancy firms,” the commission said.
The SEC added that certain defendants have been marketed on websites, some of which displayed a fake certificate indicating that the defendant was registered with the SEC, even though it was not.
The defendants were charged with violating Sections 204(a) and 207 of the Investment Advisers Act of 1940. The SEC is seeking permanent injunctions enjoining them from violating the charged provisions of the federal securities laws, conduct-based injunctions prohibiting them from filing Forms ADV as exempt reporting advisers, and civil penalties.
The SEC also emphasized that its Office of Investor Education and Assistance has issued an investor alert warning investors that scammers are using SEC ERA filings to create a false impression of legitimacy and to lure investors into scams.
Investors were urged to be wary of a purported ERA that offers investment advice directly to individual investors or claims to be registered with the SEC.
Separately, the ERA filings of the 38 entities have been removed from the commission’s website.
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