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SEC bars adviser for faking amount of client assets
November 20, 2012 / 10:51 PM / 5 years ago

SEC bars adviser for faking amount of client assets

(Reuters) - An investment adviser who federal regulators said misrepresented the amount of assets his firm managed in order to remain registered with federal, instead, of state, securities regulators, has been barred from the industry, the Securities and Exchange Commission announced Tuesday.

Evens Barthelemy, founder of Barthelemy Group LLC, misrepresented his firm’s assets under management by 10 times the actual amount - $26.28 million instead of the actual $2.628 million, according to the SEC.

Advisers who manage less than $25 million, such as Barthelemy, have long been required to register with state regulators.

Barthelemy and New York-based Barthelemy Group did not return calls requesting comment. He did not admit nor deny the SEC’s findings, according to a settlement agreement with the agency. Barthelemy may reapply for admission to the industry in two years.

Some advisers prefer to be SEC registered because of the cache is can have with clients, said Nancy Lininger, head of The Consortium, a compliance consultancy in Camarillo, California. They can say they are “with the big guys and have lots of money under management,” Lininger said.

The SEC learned of Evens Barthelemy’s alleged misrepresentation while examining the firm in 2010, according to the settlement. Barthelemy, who was also the firm’s managing director and compliance officer, represented on regulatory forms that the firm managed more than $26.5 million and between 70 and 90 accounts.

But SEC examiners learned from the firm’s independent custodian, which held client funds, that the assets totaled only $2.6 million.

Reporting By Suzanne Barlyn; Editing by Leslie Adler

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