What You Need to Know
- The CEO, Munish Sood, directly and indirectly paid more than $96,000 to influence prospective clients to retain PWM.
- Sood influenced amateur athletes to retain PWM as an investment advisor after they turned pro, the SEC says.
- PWM failed to disclose the referral payments before prospects signed the advisory agreements.
The Securities and Exchange Commission has issued a cease-and-desist order against a former investment advisory firm and its CEO for participating in what the regulator said was a widespread bribery scheme that misled a number of prospective clients who were past, present and prospective NCAA Division I college athletes.
In its order, released Thursday, the SEC states that between February 2016 and September 2017, Rosedale Asset Management LLC, formerly Princeton Advisory Wealth Management LLC, a registered investment advisor, through the actions of its CEO Munish Sood, directly and indirectly made at least 20 payments totaling more than $96,000 to individuals and entities who would “influence amateur athletes to retain PWM as an investment advisor after they turned pro and had money to invest, or introduce Sood to others who, in exchange for additional payments, would influence these same prospective clients to retain PWM.”
As a result, “at least five former NCAA (now professional) basketball players signed advisory agreements with PWM,” the order states. “PWM failed to disclose to the prospective clients the facilitating referral payments before they signed the advisory agreements.”
According to the order, from at least March 2015 through Oct. 23, 2017, Sood owned at least 95% of PWM, and served as its CEO, Chief Investment Officer and control person.
In October 2017, PWM legally changed its name to Rosedale Asset Management, LLC and Sood divested his direct ownership, the SEC said.
From January 2012 through February 2018, Sood was also associated with PWM.