Owner, Funds Try to Deceive Clients

Telling the truth is key to the federal securities laws. Viewed in this context it is fundamental that  advisers, their owners and others are candid with clients. Indeed, advisers have a fiduciary duty to clients, the highest duty under the law. Accordingly, it is axiomatic that funds and their affiliates are obligated by tell the truth to clients. A recent case filed by the Commission illustrates the point.  SEC. v. Vukota Capital Management, LLC,  Civil Action No. 1:25 – cv – 02821 (D. Colo. Filed Sept. 9, 2025).

Named as defendants in this action are: 1) Vukota Capital,  an unregistered investment adviser founded and owned by Defendant Vukota;  2). VCM Global Asset Management LTD, an exempt reporting adviser, also founded by Mr. Vukota and owned by him; and 3)  Tomislav Vukota, a former resident of Colorado who owns the entities but is not registered as an adviser or in any capacity with the Commission.  He now resides in Nassau, the Bahamas.

Defendants engaged in three types of negligent conduct in the matters involved here. First, over a five – year period beginning in 2017, Defendants Vukota and VCM caused various private funds they advised to make short term loans to VCM at unfavorable rates. Indeed, the partnership agreements prohibited the rates being offered.

Second, in early February and March 2021, Mr. Vukota used VCM tried to  buy out four Private Funds.  This was attempted by sending buyout letters that failed to disclose certain conflicts the firm had as to such transactions. Stated differently, investors were never told about the undisclosed conflicts.

Third, over a period of six years, beginning in 2017, Defendants Vukota and VGAM made material misstatements in marketing and offering materials for the Vukota Multi – Strategy  Fund.  The materials used clamed that the fund was audited which it was not while misstating its filing status as an exempt reporting fund  — it was not. The complaint alleges violations of Securities Act Sections 17(a)(2) and 17(a)(3), and Advisers Act Sections 206(2)  and 206(4)-8. See  Lit. Rel. No. 26393 (Sept. 9, 2025).