Adviser Settles and is Barred For Fraudulent Client Investments

Investment advisers have been a key focus of SEC Enforcement in recent year. Beginning several years ago the number of cases brought each year involving advisers began to climb. At the time the leading category of actions was typically corporate financial fraud and disclosures. No longer. Now it is actions involving investment advisers, often keyed to conflicts and similar issues. The Commission’s most recent settlement involving an advisor and his firm took a different turn however – it focused on fraudulent investing. SEC v. Coggins, Civil Action No. 70-cv-23444 (S.D. Fla. Settled Nov. 9, 2020).

David C. Coggins and Coral Gables Asset Management LLC, an investment adviser he controlled, were named as defendants. Beginning in 2015 Defendants solicited investors using a series of lies about the nature of the investments, how the money would be invested and the performance of the funds. While about $1.85 million was raised, a substantial portion of the investor money was misappropriated. The portion that was invested performed poorly. The complaint alleges violations of Securities Act Section 17(a), Exchange Act Section 10(b), and Advisers Act Sections 206 (1), 206(2) and 206(4).

The Court entered final judgments based on consent, against each Defendant. The injunctions were based on the sections cited in the complaint. The question of monetary penalties was reserved for consideration by the Court at a later date. The Commission, in a separate administrative proceeding, barred Mr. Coggins from the securities business. See Lit. Rel. No. 24959 (Nov. 9, 2020).