SEC Charges Advisor in Alleged $13 Million Fraud Against Teachers and Retirees
The Securities and Exchange Commission has charged an Indianapolis-based investment advisory firm and its sole owner with selling approximately $13 million of high-risk securities to more than 120 advisory clients.
The Securities and Exchange Commission has charged an Indianapolis-based investment advisory firm and its sole owner with selling approximately $13 million of high-risk securities to more than 120 advisory clients – many of whom are current or former teachers or other workers in public education.
The SEC’s complaint alleges that from December 2012 to October 2016, Steele Financial Inc. and Tamara Steele sold to advisory clients and other investors the securities of Behavioral Recognition Systems Inc., a private company previously charged with fraud by the SEC.
Steele and Steele Financial received commissions of cash and warrants that were worth more than $2.5 million, or roughly 18 percent. The complaint further alleges that the defendants created false invoices and took other steps to conceal their involvement selling BRS securities.
“We allege that Steele took advantage of her own advisory clients, including clients whom she herself described as ‘two-pension, two Social Security families,’” said Antonia Chion, associate director of the SEC’s division of enforcement. “Investment advisers must put their clients’ interests ahead of their own and make full and fair disclosure of financial conflicts of interest.”
The SEC’s complaint, filed in federal district court in Indiana, charges the defendants with violating the antifraud and broker-dealer registration provisions of the federal securities laws. The SEC is seeking disgorgement of ill-gotten gains with interest, penalties, and permanent injunctions.
