RIA Compliance Blog
In September 2023, the U.S. Securities and Exchange Commission (“SEC”) filed a complaint against Lufkin Advisors, LLC, a now de-registered Registered Investment Adviser, and its President, Chauncey Forbush Lufkin, III (collectively, “Defendants”) in the U.S. District Court for the Southern District of Florida.
The SEC first alleged an ongoing fraudulent course of conduct for multiple years. To support this claim, they alleged that the Defendants
- Failed to manage assets entrusted to them,
- Lost control–due to a lost or forgotten password–of cryptocurrency assets valuing an estimated $10 million for at least a year without notification to the client(s),
- Made investments with Mr. Lufkin’s spouse’s company without the appropriate conflict of interest disclosures,
- Failed to account for withdrawals from private funds, and
- Failed to monitor the value of investments in private funds.