The U.S. Securities and Exchange Commission filed 38 separate civil complaints in the U.S. District Court for the District of Colorado on August 27, alleging entities submitted false Forms ADV between 2025 and 2026 to appear legitimate investment advisers. According to SEC reports, the defendants allegedly used false SEC filings, nonexistent auditors, and fake certificates to target retail investors nationwide. The regulator removed all 38 filings and seeks permanent injunctions, filing bans, and civil monetary penalties against the entities.
The SEC complaints identify repeated filing patterns where defendants listed Colorado business addresses where they had no physical presence and supplied disconnected telephone numbers or numbers belonging to unrelated businesses. As reported by the SEC, many filings contained identical or nearly identical information, with purported funds commonly reporting either ₹6,700 crore ($78.96 million) or ₹4,000 crore ($48.96 million) in assets, 89 or 33 investors, and minimum investments of either ₹4 crore ($50,000) or ₹50 lakh ($5,000). The entities also listed matching ownership structures attributing 10% ownership to advisers or related parties, 90% to foreign investors, and 50% to funds of funds.
The SEC alleges that several defendants accessed the filing system through IP addresses traced to foreign jurisdictions, though it did not identify every country or allege all 38 entities operated outside the U.S. According to SEC reports, commission attorneys requested records supporting firms' reported assets, investors, employees, auditors, and fund operations, but defendants allegedly failed to provide the requested material. In the case against Abrdn Canada Limited, SEC staff mailed a records demand to its stated Denver address in April, which was returned as undeliverable, while calls reached a disconnected number and later emails received no response.
The SEC alleges defendants exploited the process because exempt reporting advisers (ERAs) are not SEC-registered investment advisers and must submit limited information through Form ADV without prior approval. As reported by the SEC, some related websites displayed certificates falsely stating entities had received "SEC RIA permission," using genuine filing and registration numbers to appear authentic. The complaints allege some defendants adopted names referring to crypto, exchanges, emerging technology, or financial education, including CryptoOrbit, Pinnacle Crypto Exchange, Web3 University, Axivon Exchange, and Future Finance Academy, though the SEC did not characterize every defendant as a crypto business.
The SEC charged defendants under Sections 204(a) and 207 of the Investment Advisers Act, which govern adviser records and false statements made in required filings. The agency seeks permanent injunctions, civil penalties, and orders preventing entities from submitting future Forms ADV as exempt reporting advisers, with penalty amounts to be determined by courts. The SEC directed FINRA to remove the 38 filings from the Investment Adviser Public Disclosure database and advised investors not to treat Form ADV appearance as proof of SEC registration, recommending independent verification of firm status and avoiding transfers when ERAs approach individual investors directly.
