Adviser Falsely Claims Internet Adviser Basis on Form ADV for Registering with the SEC

December 15, 2011

The SEC brought an administrative action against RetireHub, Inc., a Boston, Massachusetts based investment adviser, and its chief executive officer, Sunil K. Bhatia, alleging that they filed with the SEC Forms ADV between 2003 and 2010 with materially inaccurate statements.  One inaccuracy was the bases for registration with the SEC.

The SEC found that all of RetireHub’s Forms ADV inaccurately stated that the firm was an Internet investment adviser.  According to the SEC, RetireHub did not qualify as an Internet investment adviser under the Investment Advisers Act of 1940 because from 2003 to 2007 RetireHub was not providing investment advice to users through an interactive website, and, from 2007 to 2010, it did not provide investment advice exclusively through its website.  In addition, the SEC stated that certain of RetireHub’s Forms ADV inaccurately stated that RetireHub had more than $25 million in assets under management and inflated the number of the firm’s accounts.  The SEC found that RetireHub misrepresented the nature of its services by falsely stating in Form ADV filings that RetireHub provided continuous and regular supervisory services to its clients.  Lastly, RetireHub did not file its required annual Form ADV amendments in 2004, 2006, 2007 and 2009.

Bhatia was ordered to pay a civil money penalty in the amount of $25,000.

Click here to access the administrative order.


Categories

Enforcement Actions, Investment Advisers