New York Securities Lawyer Blog
Recently, the Securities and Exchange Commission (“SEC”) banned registered representative, Carl Johns, of Boulder Investment Advisers, from the securities industry for a period of 5 years for misleading and obstructing his Chief Compliance Officer (“CCO”). According to reports, the SEC investigated Johns and found that from 2006 through 2010, Johns failed to pre-clear or report hundreds of securities trades in his personal accounts; failed to disclose those trades in his trading reports; and then created fake documents to mislead his firm’s CCO during the firm’s internal investigation of Johns’ trading practices. Specifically, it was reported that Johns failed to pre-clear or report 640 trades, 90 of which involved securities held or acquired by funds which were managed by Boulder Investment Advisers. Moreover, the reports stated that Johns deleted those transactions from his personal brokerage statements before providing the account statements to Boulder Investment Advisers’ CCO in an effort to mislead the CCO’s investigation. Johns settled the SEC charges by agreeing to pay $231,168 of disgorgement, prejudgment interest of $23,889 and a $100,000 penalty. Moreover, Johns will be banned from the securities industry for 5 years. According to a statement made by Julie Lutz, co-director of the SEC’s Denver regional office, “Securities industry professionals have an obligation to adhere to compliance policies, and they certainly must not interfere with the chief compliance officers who enforce those policies . . . Johns set out to cover up his compliance failures by creating false documents and misleading his firm’s CCO.”
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