SEC Charges California Investment Adviser in Multi-Million Dollar Fraud

May 16, 2018/US SEC

The Securities and Exchange Commission today announced that investment adviser William Jordan of Orange County, California, has settled charges for perpetrating a multi-million dollar fraud on his clients.

The SEC’s complaint alleges that, from 2011 until 2016, as he raised more than $71 million from approximately 100 advisory clients, Jordan lied to investors about how their funds would be invested, about their investments’ performance, and about his own disciplinary history. Jordan is alleged to have overstated the value of the assets in several of his 16 private investment funds, and then to have used those inflated values and unrealized “profits” on other investments to overpay management fees and bonuses to himself and his entities. The complaint further alleges that the 16 funds were never audited, despite Jordan’s promises to investors. The open funds, along with other Jordan-affiliated entities, sought bankruptcy protection in May 2017 and are under the control of an independent Chief Restructuring Officer.

The SEC’s complaint charges Jordan with violations of the antifraud provisions of the federal securities laws: Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Investment Advisers Act of 1940. Jordan settled the action by consenting to the entry of a permanent injunction without admitting or denying the allegations of the complaint. The appropriate amount of disgorgement, prejudgment interest and civil penalties will be determined by the federal district court in Orange County, California.

The SEC’s investigation was conducted by Janet Rich Weissman and supervised by Ansu N. Banerjee, and the litigation as to the appropriate monetary relief will be led by Amy J. Longo, all from the SEC’s Los Angeles Regional Office. The SEC acknowledges the assistance and cooperation of the California Department of Business Oversight.

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