SEC Whacks SoCal Investment Adviser
WASHINGTON (CN) - The SEC claims that San Diego-based Total Wealth Management, its CEO and others misled investors by paying themselves kickbacks or so-called "revenue-sharing fees."
The SEC filed an administrative cease and desist order against Total Wealth Management; its CEO Jacob Cooper, of Washington, Utah; its president and CFO Nathan McNamee, of Hurricane, Utah; and David Douglas Shoemaker, of San Diego, Total Wealth's founder.
The complaint states: "Since at least 2009, Total Wealth and Cooper have breached their fiduciary duties to their clients and investors through a fraudulent scheme to collect, and conceal their receipt of, undisclosed revenue sharing fees derived from investments they recommended to their clients. Total Wealth, Cooper, McNamee, and Shoemaker each received undisclosed revenue sharing fees, which were funneled through entities created by the individuals to mask their receipt of the fees. In addition, Total Wealth and Cooper materially misrepresented to investors and clients the extent of the due diligence conducted on the investments they recommended. Total Wealth also violated the custody rule by failing to obtain annual audits from an independent public accountant subject to regular inspection by the Public Company Accounting Oversight Board."
The SEC seeks disgorgement of ill-gotten gains, with interest, financial penalties and an accounting.