The Securities and Exchange Commission (SEC) ordered a New York-based investment adviser and its principal to pay a total of $250,000 over their alleged failure to disclose misuse of profits raised from clients.
Matthew Bruderman and his firm, Bruderman Asset Management, agreed to cease and desist from further violations and a censure in reaching settlement, the SEC announced in a press release Tuesday. The firm was also faulted for not implementing policies and procedures concerning disclosure of conflicts of interest.
The agency acknowledged remedial acts undertaken by the firm and Bruderman, including voluntarily repaying certain debts to clients totaling nearly $1.7 million.
The details: From at least February 2017 through August 2021, Bruderman Asset Management advised at least 13 clients to invest at least $6.1 million in three companies in which Bruderman had decision-making authority and ownership interests, the SEC alleged in its order.
The firm and Bruderman failed to disclose to the clients their investments would be temporarily used to fund payroll and repay loans, the SEC said.
“Full disclosure of conflicts of interest is a central safeguard for investors who place their trust in investment advisers,” said Sheldon Pollock, associate director of the SEC’s New York regional office. “Our program remains focused on ensuring that investment advisers make full and complete disclosures in order to increase investor confidence.”
The firm did not respond to a request for comment. It agreed to settle without admitting or denying the SEC’s findings.