Securities Lawyers Blog
The attorneys at Gana Weinstein LLP are reviewing court documents and complaints related to The Securities and Exchange Commission’s (SEC) charge a Connecticut investment advisory firm Temenos Advisory, Inc. (Temenos) and its principal, George L. Taylor (Taylor) put $19 million of investor money, including elderly investors’ retirement savings and pension plans, in risky investments and all the while secretly pocketing large commissions.
The SEC alleged that from 2014 through 2017, Temenos and Taylor defrauded their advisory clients and by steering the clients into unsuitable investments and by hiding commissions and other financial incentives that Temenos and Taylor were pocketing on top of the advisory fees clients paid. In addition, the SEC found that Temenos and Taylor repeatedly downplayed and concealed risks, and overstated potential gains with the illiquid private placements
The SEC accused Temenos and Taylor of violating their fiduciary duty that every investment adviser owes to its clients that requires firms to put client interests first, to deal with clients with the utmost honesty, to disclose all conflicts or potential conflicts of interest, and to use reasonable care in providing investment advice.
Some of the of the specific failings the SEC alleged include:
- failing to perform due diligence by failing to, in some instances, review full financial information and investigating the truth of claims made by the issuers;
- failing to disclose known defects that came to their attention including the poor conditions of some of the companies being sold, questionable spending practices, and other potential liabilities;
- making misstatements and omissions in the companies’ marketing materials, and dubious claims by one company about its technology;
- grossly understating significant risks of investing in private placements generally;
Under the securities laws financial advisors must conduct due diligence and have a reasonable basis for their investment recommendations. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. When dealing with alternative investments and private equity deals due diligence can be more challenging but firms are responsible to meet those heightened challenges prior to recommending the investment to its clients.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. The attorneys at Gana LLP are experienced in representing investors in cases of financial advisors failing to conduct proper due diligence on investments. Our consultations are free of charge and the firm is only compensated if you recover.