SEC CHARGES INVESTMENT ADVISER AND HIS ADVISORY FIRM WITH LYING ABOUT NEARLY EVERY ASPECT OF HIS MUTUAL FUND

Here's an interesting SEC case involving charges of investment fraud leveled against an investment adviser and a mutual fund to which he provided investment advice. The SEC charges Joshua Goltry and his investment advisory firm, JAG Capital Advisors LLC, with hyping the value of the JAG Fund by "lying about nearly every aspect of the fund, including its performance, investment activity, and investment risks," and using investor money to pay for his own lavish life style.

FOR IMMEDIATE RELEASE

2024-72

Washington D.C., June 12, 2024 —

The Securities and Exchange Commission today charged Joshua Goltry and his investment management firm, JAG Capital Advisors LLC (JAG Advisors), in connection with a three-year scheme to defraud investors of at least $3 million.

According to the SEC’s complaint, from 2020 to 2023, Goltry, the founder and Chief Investment Officer of a purported equity fund called JAG Cap, LLC, and JAG Advisors, the purported equity fund’s investment manager, raised at least $3 million from approximately nine investors by lying about nearly every aspect of the fund, including its performance, investment activity, and investment risks. Goltry is the principal of JAG Advisors. As alleged, of the funds raised, Goltry and JAG Advisors used at least $1.1 million on personal expenses, including travel and jewelry, and lost more than $1.7 million through high-risk trading and speculative investments. The complaint further alleges that Goltry and JAG Advisors falsified documents, including expense invoices, to conceal the trading losses from investors.   

“As alleged in the complaint, Goltry and JAG Advisors repeatedly lied to investors to lure them into investing in the JAG Fund and then lost their money or stole it to pay for lavish personal expenses,” said Nicholas P. Grippo, Regional Director of the SEC’s Philadelphia Regional Office. “We will continue to diligently hold accountable those who exploit investors’ trust for personal gain.”

The SEC’s complaint charges Goltry and JAG Advisors with violating antifraud provisions of the federal securities laws. Goltry and JAG Advisors agreed to settle the charges against them. The settlement, which is subject to court approval, would permanently enjoin Goltry and JAG Advisors from violating the charged provisions of the federal securities laws and allows the court to decide the amounts of disgorgement, prejudgment interest, and civil penalties at a later date. 

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Goltry.

https://www.sec.gov/newsroom/press-releases/2024-72

Bob Eder in his Study for the Series 66 Exam discusses Ethics and Fiduciary Responsibilities of Investment Advisers in Chapter 16. 

NASAA publishes Series 66 Test Specifications, and you can find the provisions of Ethics and Fiduciary Responsibilities of Investment Advisers in Section IV (A - H).

Here is the link to NASAA's Test Specifications for the Series 66 Exam. 

Study for the Series 66 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's Series 66 book on Amazon. 

For questions about Bob Eder's Series 66 Manual, Study for the Series 66 Exam, or questions in general about the Series 66 Exam, or about Ethics and Fiduciary Responsibilities of Investment Advisers, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. 

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