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SEC
The Securities and Exchange Commission has pursuaded a court to freeze some assets and taken other steps against a Florida-based investment advisor because of an allegedly fraudulent offering.

The regulator filed an “emergency action” against Coral Gables Asset Management LLC and its sole owner, David C Coggins. On August 20, US District Court Judge Kathleen M Williams granted the SEC's request for emergency relief, including an asset freeze and an order for records preservation, against Coggins and Coral Gables, as well as two entities charged by the SEC as relief defendants.

Coral Gables and Coggins solicited investors for a private fund they managed by misrepresenting the fund's past performance, the amount of assets they were managing, and Coggins' experience as a portfolio manager, the SEC said in a statement.

For example, the complaint alleges that one document Coggins provided to investors and potential investors showed 37 months of positive monthly performance even though, in reality, in approximately 26 months during the specified timeframe the fund had negative performance. 

The SEC also claims that Coral Gables and Coggins falsified brokerage records and investor account statements and created and sent fake audit opinions to investors and third parties. As alleged, within hours of receiving a request from the SEC to preserve documents, Coggins destroyed evidence related to his fraudulent conduct. According to the complaint, Coggins misappropriated investor funds for personal use, including a luxury vehicle and travel.

"As we allege, Coggins drew in investors by suggesting that he was an experienced manager with a highly successful private fund and then took elaborate steps to conceal the truth of his fraud, including destroying evidence after being contacted by the SEC," Kurt L Gottschall, director of the SEC's Denver regional office, said. "The SEC's emergency action is intended to protect prospective investors from future harm by halting what we allege is an ongoing fraud and preserving the remaining evidence."

The SEC's complaint, filed in the US District Court for the Southern District of Florida, charges Coral Gables and Coggins with violating antifraud provisions of the federal securities laws. The SEC's complaint also charges Coggins, in the alternative, with aiding and abetting Coral Gables' violations of the Investment Advisers Act of 1940. The SEC seeks injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, and financial penalties against the defendants. The SEC also charged Coral Gables Asset Holdings, LP and its successor entity, Coral Gables Capital, LP, as relief defendants.

The SEC investigation into the matter continues.

FINRA
The US wealth advisory industry group and regulator has postponed all in-person arbitration and mediation proceedings scheduled through October 30, 2020 because of the continuing COVID-19 crisis. However, such proceedings will not be affected if the parties stipulate to proceed telephonically or by Zoom, or the panel orders that the hearings will take place telephonically or by Zoom. 

FINRA said its Office of Hearing Officers has postponed all in-person hearings of disciplinary proceedings scheduled through October 2, 2020. Disciplinary hearings scheduled to occur after October 2, 2020, will be assessed on a case-by-case basis to determine if FINRA will conduct or further postpone each individual hearing, it said.