SEC Charges Mutual Fund Adviser with Failing to Timely Produce Records During an Examination

November 20, 2012

The SEC found that from December 2010 to mid-2012, EM Capital, a registered investment adviser to a mutual fund located in Moraga, California, and its principal Freeman failed to furnish required books and records upon request by the SEC’s Investment Adviser/Investment Company examination staff. The requested records included financial statements, e-mails, and documents relating to EM Capital’s management of the EM Capital India Gateway Fund, a mutual fund that primarily invested in Indian equities. The staff, according to the SEC, repeatedly asked EM Capital and Freeman to produce the required books and records, and Freeman repeatedly promised to do so, but ultimately did not fully comply until September 2012, months after the staff notified him that it was considering enforcement action against him and the firm.

The SEC found that EM Capital violated and Freeman aided and abetted and caused EM Capital’s violations of Section 204 of the Advisers Act and Rule 204-2 thereunder, which requires SEC-registered investment advisers to produce required books and records to the SEC’s staff.

Click to access the administrative action.


Investment Advisers, Investment Companies