Adviser Charged with Self-Dealing

Investment Advisers are supposed to act in the best interests of their clients and not engage in self-dealing. Yet in one recent case the Commission charged the adviser with just that, engaging in self-dealing. SEC v. Taller, Civil Action No. 1:25-cv-03537 (S.D.N.Y. Filed April 29, 2025).

Named as defendants are Derek Taller and two investment funds he managed over a six-year period, beginning in 2018, StHealth Capital Investment Corporation and Vision BioBanc Holdings, LLC. At the time StHealth Capital operated as a business development company. He also served as an external investment adviser to each of the funds.

In 2020 Defendant Taller, while serving as CEO of Vision Holdings, disseminated offering documents to prospective investors. Those materials stated that Vision Holdings operated a board of directors and would be audited by one of the “Big Four” accounting firms. The materials also stated that the auditor’s work would be reviewed by Vision Holdings Audit Committee. The representations were false. In fact, the firm had little supervision.

As investment adviser to both Vision Holdings and StHealth, Defendant Taller owed them fiduciary duties to act in the best interests of each firm. Mr. Teller repeatedly violated those duties however. While serving in those positions he misappropriated at least $300,000 from Vision Holdings. Later he misappropriated an additional $200,000.

In addition, Defendant Taller engaged in a course of conduct that involved both firms. He at one point, for example, directed both firms to make loans to Company A and its affiliates, a firm in which Mr. Taller had just acquired an interest. Mr. Taller continued to direct Vision Holdings to make loans until the total exceeded $21 million. The Commission’s complaint alleges violations of Securities Act Section 17(a), Exchange Act Section 10(b) and Advisers Act Sections 206(1) and 206(2) and Section 57(a)(4) of the Investment Company Act. See Lit. Rel. No. 265300 (May 1, 2025).