The Securities and Exchange Commission announced charges Tuesday against a San Diego-based investment advisory firm, its chief executive officer, chief compliance officer and another employee for misleading investors and breaching their fiduciary duties to clients.
The SEC’s Enforcement Division alleges that Total Wealth Management and its owner and CEO, Jacob Cooper, entered into undisclosed revenue sharing agreements through which they paid themselves kickbacks or so-called “revenue sharing fees.”
The firm failed to disclose to clients the conflicts of interest created by these agreements as they recommended the underlying investments to clients and investors in the Altus family of funds, the SEC says.
Total Wealth and Cooper also materially misrepresented the extent of the due diligence conducted on the investments they recommended.
Total Wealth’s CCO, Nathan McNamee, and investment advisor representative Douglas Shoemaker also breached their fiduciary duties and defrauded clients “by failing to disclose conflicts of interest and concealing the kickbacks they received from the investments they recommended,” the SEC states.