Excessive Advisory Fee Case Brought by SEC

September 27, 2013

The SEC filed an action in federal court in the Western District of North Carolina, charging Frank Dappah of Charlotte, North Carolina, and his firm, Yatalie Capital Management, a sole proprietorship, with charging grossly excessive fees to their advisory clients without authorization or notice and other violations. The SEC alleges that Dappah and his firm took from the clients' fees far in excess of what they were entitled to under the client advisory agreements. The SEC alleges that between March 2012 and July 2013, Dappah took advisory fees of nearly $75,000 on assets under management averaging around $205,000. One client, according to the complaint, lost $9200 in unauthorized fees to Dappah in less than a year on investments of around $23,000.


The SEC also alleges that the advisory firm was improperly registered with the SEC as an investment adviser. The SEC added that the firm made multiple materially false statements in its Forms ADV, on the firm's website and elsewhere. Lastly, the SEC found that the firm failed to maintain client advisory agreements.

Click here for the administrative action.


Categories

Investment Advisers