SEC Obtains Final Judgment Against Cape Cod-Based Investment Adviser Charged with Fraud

June 11, 2019/US SEC

On June 3, 2019, a federal court judge entered a final judgment against Massachusetts resident and Cape Cod-area investment adviser Kimberly Pine Kitts in an SEC case that charged Kitts with defrauding multiple clients by stealing over $3 million from their investment and retirement accounts.

On July 19, 2018, Kitts was charged by the SEC for her six-year scheme to steal money from client accounts by forging client signatures on withdrawal requests from variable annuities, forging client signatures to wire funds from client brokerage accounts, and misleading clients into withdrawing funds to make fake tax payments. Kitts used the money she stole for personal expenses, including paying for vacations and several luxury vehicles. In a parallel criminal case, Kitts pled guilty and was sentenced to 87 months in prison and ordered to pay more than $3 million in restitution.

The final judgment in the SEC’s case permanently enjoins Kitts from violating the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and orders her to pay disgorgement and prejudgment interest totaling $2,882,221. Her payment obligation is deemed satisfied by entry of the restitution order entered against her in the parallel criminal case. On June 6, 2019, Kitts was also barred by the Commission from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and from participating in any offering of a penny stock.

The Commission’s case was handled by Gretchen Lundgren, John McCann, and Michele T. Perillo of the Boston Regional Office. The SEC appreciates the assistance of the FBI and the U.S. Attorney’s Office for the District of Massachusetts.

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