Improper SEC Registration

iStock_000016171603Illustra_HiResThe Securities and Exchange Commission filed 734 enforcement actions in the fiscal year that ended September 30, 2012. In the area of Investment Advisers, the SEC filed several actions as a result of the compliance initiative, looking for advisers who lack effective compliance programs designed to prevent securities laws violations. One of those actions was filed November 20, 2012 against Evens Barthelemy and Barthelemy Group LLC.

The action arose out of improper SEC registration (did not meet the indicated “exemption” based on number of states required to be registered with, or the minimum assets under management requirement); materially false Form ADV filings (state filings and assets under management); record keeping requirements (written acknowledgements of the code of ethics and a record of the dates that ADV Part II was given or offered to clients or prospective clients); a lack of adequate policies and procedures (adviser adopted a broker-dealer manual and did not tailor it to the advisory firm); and, a failure to conduct the annual review of the policies and procedures.

As a result the firm was required to withdraw from SEC registration; update Form ADV and provide a copy to each state regulator with which the adviser was required to register; provide a copy of the amended ADV with a cover letter acceptable to the Commission’s staff to all existing clients using reasonable efforts to obtain an acknowledgement of receipt; post a copy of the Order on the adviser’s website for two (2) years; and certify, in writing, compliance with these undertakings. In addition, Mr. Barthelemy was barred from the industry with the right to apply for reentry after two (2) years.

For more detailed information please visit: www.sec.gov/litigation/admin/2012/ ia-3503.pdf

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