The Securities and Exchange Commission announced charges Monday against four investment advisory firms for inflating their assets under management on Form ADV as well as making material misrepresentations and unsubstantiated statements in forms filed with the SEC regarding their organizations, office locations and clients.
The SEC’s complaints were filed separately in the U.S. District Courts for the Southern District of New York, against Bluesky Eagle Capital Management Ltd. and Supreme Power Capital Management Ltd., and in the District of Colorado against AI Financial Education Foundation Ltd., AI Investment Education Foundation Ltd., Invesco Alpha Inc., and Adamant Stone Limited.
According to the SEC’s complaints, in their ADV filings made on various dates in 2023 and 2024, "Bluesky Eagle, Supreme Power, AI Financial, and Adamant Stone each claimed to manage $10 million in assets in the United States, Invesco Alpha claimed to manage $5 million in assets, and AI Investment claimed to manage $1 million; and they each claimed to advise a private fund and that a separate registered investment adviser reported information about those private funds on its own Form ADV."
In addition, according to the complaints, Bluesky Eagle and Supreme Power claimed that they were public companies operating out of office space in New York City.
"The complaints allege that AI Financial, AI Investment, Invesco Alpha, and Adamant Stone claimed that they operate out of office space" in Denver, the complaint states.
"Contrary to these representations, the complaints allege that the current business residents of the New York and Colorado office spaces have no knowledge of the entity or its purported management personnel claiming to operate there, and the other adviser has not reported information about the purported private funds," the SEC said.
Bluesky Eagle and Supreme Power claimed to be public companies, but a search of the SEC's public-company database yields no information on either, the agency says in the complaint.
Further, the complaints allege that Bluesky Eagle, Supreme Power, AI Financial, AI Investment, Invesco Alpha and Adamant Stone "each failed to respond to requests by the Commission to provide records to substantiate the information on their Forms ADV, including the amount of assets under management in the United States."
The SEC charges Bluesky Eagle, Supreme Power, AI Financial, AI Investment, Invesco Alpha and Adamant Stone with violations of Sections 204(a) and 207 of the Investment Advisers Act of 1940. The complaints seek injunctive relief and civil penalties.
The Financial Industry Regulatory Authority assisted in the matter.
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