SEC v. BRITE ADVISORS USA, INC., No. 1:23-cv-10212, Southern District of New York (Nov. 21, 2023) — Complaint

ANTONIA M. APPS
REGIONAL DIRECTOR
Sheldon L. Pollock
Wendy B. Tepperman
Travis Hill
Jonathan M. Grant
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004-2616
212-336-9135 (Hill)
[email protected]

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

BRITE ADVISORS USA, INC.,

                                             Defendant

COMPLAINT

23 Civ. 10212

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendant Brite Advisors USA, Inc. (“Brite USA” or “Defendant”), alleges as follows:
SUMMARY
1. Brite USA — a Commission-registered investment adviser with nearly
$400 million in client assets under management maintained by Brite Advisors Pty Ltd. (“Brite
Australia”) — has failed and continues to fail to comply with the Commission’s “Custody Rule,”
which, to ensure the safety of client assets, requires an annual report from an independent public
accountant of Brite Australia’s internal controls.  In addition, Brite USA has violated and

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continues to violate its fiduciary duty to its advisory clients to fully disclose conflicts of interest
and risks to client assets created by Brite Australia borrowing tens of millions of dollars in loans
backed (collateralized) by Brite USA’s client assets.
2. Brite USA and Brite Australia are under common control.  For purposes of the
Custody Rule, Brite USA therefore has custody of Brite USA client funds and securities
maintained by Brite Australia, and Brite USA thus must comply with the Custody Rule.
3. From 2019 to present (the “Relevant Period”), Brite USA has failed to comply
with the Custody Rule’s requirement that it obtain or receive from Brite Australia an annual
internal control report — an important safeguard that verifies client assets — from an
independent public accountant registered with the Public Company Accounting Oversight Board
(“PCAOB”), in violation of Section 206(4) of the Investment Advisers Act of 1940 (“Advisers
Act”) and Rule 206(4)-2.
4. In addition, Brite USA has received millions of dollars in operational funding
arranged by Brite Australia’s parent company, Brite Advisory Group Limited (the “Brite Group
Parent”), during the Relevant Period.  This funding, in the form of regular cash wires to Brite
USA from Brite Australia and other entities controlled by, or under common control with, the
Brite Group Parent (together, the “Brite Group”), has been critical to Brite USA’s ability to meet
operating expenses.
5. Brite USA’s reliance on the Brite Group for funding creates conflicts of interest
that Brite USA, as an investment adviser, has a fiduciary duty to fully and fairly disclose to its
advisory clients.  Brite USA has failed to do so.
6. Moreover, Brite USA has failed to comply with its fiduciary duty to fully disclose
that, during the Relevant Period, a primary source of the funding to cover its operating expenses

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has been margin loans or other debt secured by client assets, including the assets of Brite USA
clients.  Brite Australia’s use of client assets as collateral presents additional risks and conflicts
of interest that should have been disclosed.
7. In failing to fully disclose these related risks and conflicts of interest, Brite USA
breached its fiduciary duty to its advisory clients in violation of Advisers Act Section 206(2).
8. In October 2023, Brite Australia’s Australian regulator announced that it had
sought and obtained an order from an Australian federal court freezing Brite Australia’s assets in
part because “the value of [Brite Australia’s] funds under management has not been reported by
any entity within the Brite Group in an audited balance sheet since December 2019.”
VIOLATIONS
9. By virtue of the foregoing conduct and as alleged further herein, Defendant has
violated Sections 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 80b-6(2)   and 80b-6(4)  ]
and Rule 206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].
10. Unless Defendant is  restrained and enjoined, Defendant will engage in the acts,
practices, transactions, and courses of business set forth in this Complaint or in acts, practices,
transactions, and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
11. The Commission brings this action pursuant to the authority conferred upon it by
Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-9(e)].
12. The Commission seeks a final judgment: (a) permanently enjoining Defendant
from violating the federal securities laws and rules this Complaint alleges it has violated; (b)
ordering Defendant to pay civil money penalties pursuant to Advisers Act Section 209(e) [15

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U.S.C. § 80b-9(e)]; and (c) ordering any other and further relief the Court may deem just and
proper.
JURISDICTION AND VENUE
13. This Court has jurisdiction over this action pursuant to Advisers Act Section 214
[15 U.S.C. § 80b-14].
14. Defendant, directly and indirectly, has made use of the means or instrumentalities
of interstate commerce or of the mails in connection with the transactions, acts, practices, and
courses of business alleged herein.
15. Venue lies in this District under Advisers Act Section 214 [15 U.S.C. § 80b-14].
Defendant’s principal office and principal place of business is in the Southern District of New
York, Defendant conducts business in this District and certain of the acts, practices, transactions,
and courses of business alleged in this Complaint occurred within this District.
DEFENDANT
16. Brite USA (f/k/a deVere USA, Inc., prior to January 2019) is a Florida
corporation with its principal place of business in New York, New York.  Brite USA has been
registered with the Commission as an investment adviser since 2013.  In its 2022 annual
updating Form ADV amendment filed with the Commission on March 30, 2023, Brite USA
reported regulatory assets under management of approximately $468 million.  On June 4, 2018,
while the firm was named deVere USA, Inc., the Commission instituted settled administrative
and cease-and-desist proceedings against the firm finding violations of Sections 206(1), 206(2),
207 and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder relating to its failure to
disclose compensation obtained from third-party product and service providers it recommended
to clients and other violations.  The firm consented to the order without admitting or denying the

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Commission’s findings.  In the Matter of deVere USA, Inc., Adv. Act Rel. No. 4993 (June 4,
2018).
OTHER RELEVANT INDIVIDUALS AND ENTITIES
17. Brite Group Parent is a Hong Kong company and at all relevant times has been
the parent company of Brite Australia.  The Brite Group Parent also controls or is under common
control with the Brite Group, which operates worldwide as investment advisory and pension
administration firms.
18. Brite Australia is an Australian financial services firm with its registered
principal office in Sydney, Australia, and is a direct, wholly-owned subsidiary of the Brite Group
Parent.  Brite Australia is registered with and licensed by the Australian Securities &
Investments Commission (the “Australian Commission”) as a financial services business.
19. Brite Group CEO, age 57, is a Hong Kong resident, and is the founder and chief
executive officer of the Brite Group Parent.
20. Brite Group Executive-1, age 56, is a resident of the United Kingdom.  At all
relevant times, Brite Group Executive-1 has been the Chief Marketing Officer of the Brite Group
Parent and since at least August 30, 2019, has served as a Director of the Brite Group Parent.
Brite USA has reported since January 2019 that Brite Group Executive-1 is a Director of Brite
USA and the direct or indirect sole owner of Brite USA.
BACKGROUND ON THE CUSTODY RULE
21. In Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)], Congress made it
unlawful for any investment adviser to “engage in any act, practice, or course of business which
is fraudulent, deceptive, or manipulative” using means of interstate commerce.  Congress further

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directed the Commission, through “rules and regulations,” to “define, and prescribe means
reasonably designed to prevent, such” fraudulent, deceptive, or manipulative conduct.
22. In 1962, the Commission adopted Rule 206(4)-2 under the Advisers Act [17
C.F.R. § 275.206(4)-2], known as the “Custody Rule,” to require investment advisers who have
custody of client funds or securities “to maintain them in such a way that they will be insulated
from and not be jeopardized by financial reverses, including insolvency, of the investment
adviser.”  See 27 Fed. Reg. 2149 (Mar. 6, 1962), available at
https://www.govinfo.gov/content/pkg/FR-1962-03-06/pdf/FR-1962-03-06.pdf
.
23. Effective in 2010, the Commission amended the Custody Rule to “provide for a
more robust set of controls over [investment adviser] client assets designed to prevent those
assets from being lost, misused, misappropriated, or subject to advisers’ financial reverses.” See
75 Fed. Reg. 1456, at 1457 (Jan. 11, 2010), available at
https://www.govinfo.gov/content/pkg/FR-2010-01-11/pdf/2010-18.pdf
.
24. Under the Custody Rule, it is a fraudulent, deceptive, or manipulative act, practice
or course of business for a registered investment adviser to have custody of its clients’ funds or
securities unless it fully complies with all requirements of the Custody Rule.
25. For purposes of the Custody Rule, an investment adviser has “custody” if (1) it
holds, directly or indirectly, clients’ funds or securities, or (2) has authority to obtain possession
of them, or (3) if a “related person” holds the clients’ funds or securities, or has authority to
obtain them, in connection with the investment adviser’s services.  17 C.F.R. § 275.206(4)-
2(d)(2).
26. The Custody Rule defines a “related person” to “mean[] any person, directly or
indirectly, controlling or controlled by you, and any person that is under common control with

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you.”  17 C.F.R. § 275.206(4)-2(d)(7).  Under the Advisers Act, “person” means a natural person
or a company.  15 U.S.C. § 80b-2(a)(16).
27. The Custody Rule defines “control” to mean “the power, directly or indirectly, to
direct the management or policies of a person, whether through ownership of securities, by
contract or otherwise.”  17 C.F.R. § 275. 206(4)-2(d)(1)  .  The rule further specifies that “[e]ach
of your firm’s officers, partners, or directors exercising executive responsibility (or persons
having similar status or functions) is presumed to control your firm.”  17 C.F.R. § 275. 206(4)-
2(d)(1)(i).
28. If an investment adviser has custody of client assets because a related company
maintains the client assets as a qualified custodian, the Custody Rule requires the investment
adviser to obtain— within six months of becoming subject to the requirement and after that at
least once every year — an internal control report of the related company’s custody controls
prepared by an independent public accountant.  17 C.F.R. § 275.206(4)-2(a)(6)(ii).
29. The Custody Rule further requires that the internal control report include an
opinion as to whether controls have been placed in operation as of a specific date and are
suitably designed and are operating effectively to meet control objectives relating to custodial
services, including the safeguarding of funds and securities held on the clients’ behalf.  The
independent public accountant must verify that the funds and securities are reconciled to a
custodian other than the related company.  17 C.F.R. § 275.206(4)-2(a)(6)(ii).  Put another way,
the independent public accountant must confirm or test that the related company’s books and
records of client funds and securities match what is reported in accounts by unaffiliated entities,
such as an unaffiliated broker.

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30. In addition, the Custody Rule requires that the independent public accountant who
prepares the internal control report must be registered with, and subject to regular inspection by,
the PCAOB.  17 C.F.R. § 275.206(4)-2(a)(6)(ii)(C).
FACTS
I. Background
A. Brite USA’s Investment Advisory Business
31. During the Relevant Period, Brite USA’s clients have primarily consisted of
United Kingdom (“U.K.”) expatriates residing in the United States who previously held
employment-based U.K. pensions.
32. During the Relevant Period, Brite USA recommended to prospective advisory
clients that they transfer their employment-based U.K. pension assets to a self-directed U.K.
personal pension plan known as a Self-Invested Personal Pension (“SIPP”), with Brite USA
serving as the investment adviser providing ongoing investment advice to the clients.
33. Brite USA clients pay a one-time flat fee to Brite USA upon agreeing to the SIPP
transfer and an annual advisory fee to Brite USA of   1% of assets under management.
34. The Brite USA client SIPPs are administered by U.K. trustee companies, and
there is a separate arrangement with a custodian firm, such as a broker or insurance company,
that holds the client assets and provides securities trade execution.
35. During the Relevant Period, in addition to advising SIPP clients, Brite USA has
also advised clients who previously transferred their employment-based U.K. pensions to
offshore pensions, known in the U.K. as Qualifying Recognized Overseas Pension Schemes
(“QROPS”), that Brite USA recommended prior to April 2017 while operating under the deVere
USA name.

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36. QROPS are structurally similar to SIPPs.  The Brite USA client QROPS are
administered by trustee companies based outside of the U.K.  The custodian firms that Brite
USA had previously recommended to these advisory clients were companies that typically
charged such clients “establishment” fees of 1.0% to 1.1% per year over a required 10-year term
in addition to other account and trade charges.  As a result, a QROPS client who elected to
change custodians prior to the end of the required 10-year term incurred an “exit fee” equal to
the full amount remaining to be paid over the 10-year term.
B. The Brite Platform and the Exit Fees
37. In or about August 2019, Brite USA began recommending to new clients and
existing clients with SIPPs and QROPS that they move their assets to the “Brite Platform,”
which primarily would function as the custodian firm for Brite USA’s clients.
38. During the Relevant Period, the Brite USA client SIPP or QROPS assets have
been held and traded by Brite Australia in client omnibus accounts (“Client Omnibus Accounts”)
– meaning accounts that hold the assets of multiple clients.  The Client Omnibus Accounts are in
the name of Brite Australia and are held at the Australian subsidiary of a holding company with
broker-dealer operating subsidiaries in multiple jurisdictions worldwide (the “Global Broker-
Dealer”).
39. Brite Australia is responsible for entering trades on behalf of the client SIPP or
QROPS and transferring funds into and out of the Client Omnibus Accounts using the Global
Broker-Dealer’s systems.
40. The Global Broker-Dealer and its Australian subsidiary do not know the identities
of the underlying clients or their individual holdings within the Client Omnibus Accounts.
41. Brite Australia, the holder of the Client Omnibus Accounts, is responsible for
recordkeeping as to the allocation of the funds and securities held in the Client Omnibus

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Accounts and for reporting holdings and transactions to each underlying advisory client,
including for Brite USA clients, and their respective SIPP or QROPS trustee.
42. When a Brite USA client agrees to Brite USA’s recommendation to move their
SIPP or QROPS assets to the Brite Platform, the client’s existing custodian typically liquidates
any securities positions, deducts any applicable “exit fees” and/or other charges, and wires the
remaining cash proceeds to the client’s SIPP or QROPS trustee.
43. The SIPP or QROPS trustee in turn wires that amount to Brite Australia’s
designated client bank account in Australia, where it is held before being transferred to the Client
Omnibus Account for investing and custody.
44. Similarly, when a Brite USA client requests a withdrawal, or withdrawals are
needed to pay certain trustee fees a client has incurred, Brite Australia wires the funds from the
Client Omnibus Account to Brite Australia’s client bank account and then wires the funds to the
SIPP or QROPS trustee for further distribution.
45. During the Relevant Period, the Brite Group CEO and his wife were authorized
persons — meaning they had the authority to withdraw funds or take other account actions — on
the relevant Brite Australia bank accounts.
46. Because Brite USA’s QROPS clients would incur “exit fees” equal to the full
amount remaining to be paid over the 10-year term for “establishment fees” by their existing
custodians (as described in paragraph 36) if they switched custodians, when Brite USA began
recommending that QROPS clients switch to the Brite Platform, Brite USA stated that Brite
Australia would advance cash to those clients in an amount equal to their exit fee.    In turn, the
client would agree to repay the amount advanced in monthly increments without interest over a
period of up to 10 years.

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47. Brite USA represented that, by using this method, the client’s existing QROPS
assets would be fully invested on the Brite Platform, subject to the client’s repayment obligation.
II. Brite USA, Brite Australia and the Brite Group Parent Are Under Common
Control for Purposes of the Custody Rule
A. Brite Group Executive-1’s Roles at Brite USA and the Brite Group Parent
Establish Common Control
48. Brite Group Executive-1   has been the sole Director of Brite USA since at least
March 2019.
49. From February 2019 until February 2023, Brite USA stated in all of its Form
ADV filings with the Commission that Brite Group Executive-1 indirectly owned Brite USA
through his sole ownership, since January 2019, of a U.K. entity currently named BAH 2021 Ltd.
(“BAH 2021”).  Brite USA described BAH 2021 as its sole shareholder in the same Form ADV
filings.
50. On January 3, 2023, BAH 2021 updated its U.K. corporate records to reflect that,
as of December 8, 2022, BAH 2021’s owner changed from Brite Group Executive-1 to a British
Virgin Islands entity named Brite Advisory Holdings Limited, an entity for which the Brite
Group CEO is a controlling person.
51. On February 14, 2023, Brite USA filed a Form ADV amendment deleting BAH
2021 as its direct owner and asserting that Brite Group Executive-1 had been the direct and sole
owner of Brite USA since January 2019.
52. At all relevant times, as alleged in paragraph 20 above, Brite Group Executive-1
has also served as the Chief Marketing Officer of the Brite Group Parent.  In addition, since at
least August 2019, Brite Group Executive-1 has served as one of the three or four Directors of
the Brite Group Parent.

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53. In these roles, Brite Group Executive-1 has participated in regular meetings with
other managers of the Brite Group Parent, including the Brite Group CEO.
54. As alleged in paragraph 18 above, Brite Australia is a direct, wholly-owned
subsidiary of the Brite Group Parent.
B. The Brite Group CEO and The Brite Group Parent Also Control Brite USA
1. The Brite Group Parent Arranged and Funded the Acquisition of
Brite USA
55. In 2018 and 2019, the Brite Group Parent, led by the Brite Group CEO, embarked
on a plan to expand the Brite Group’s business globally, primarily through acquisitions of other
investment advisory businesses and related support businesses, with a focus on U.K. expatriate
clients with U.K. pension assets.
56. To fund the expansion, the Brite Group CEO approached an affiliate of the Global
Broker-Dealer (the “Global Broker-Dealer Affiliate”), seeking a $10 million credit facility for
purposes of making acquisitions.
57. To persuade the Global Broker-Dealer Affiliate to agree to the loan, the Brite
Group CEO promised that he would move client assets managed by the target companies to
brokerage accounts at the Global Broker-Dealer as acquisitions were made.
58. The Brite Group CEO specifically told the Global Broker-Dealer Affiliate that
Brite USA (then named deVere USA, Inc.) had over $500 million in assets under management
that would be moved to the Global Broker-Dealer after the acquisition.
59. On approximately March 15, 2019, the Global Broker-Dealer Affiliate and the
Brite Group Parent executed an agreement for a loan of up to $10 million for the Brite Group
Parent to make acquisitions.

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60. The terms of the loan provided that the Global Broker-Dealer Affiliate would
review each proposed acquisition and determine whether to approve it before permitting the
Brite Group Parent to draw down on the loan.
61. The loan agreement was also supported by a “Subsidiary Guarantee Agreement,”
also dated March 15, 2019, entered into with various Brite-named entities, including BAH 2021
(then named Brite Advisors Limited).  The Brite Group CEO had previously represented to the
Global Broker-Dealer Affiliate that BAH 2021 was the parent company of Brite USA, and Brite
Group Executive-1 signed the “Subsidiary Guarantee Agreement” on behalf of BAH 2021 and
certain other entities on that agreement.
62. On approximately March 18, 2019, the Global Broker-Dealer Affiliate approved
the Brite Group Parent’s    first drawdown request on the loan for $3.96 million, the acquisition
price of Brite USA.  The Brite Group CEO signed the drawdown request on the Brite Group
Parent’s behalf.
2. The Brite Group CEO and the Brite Group Parent Exercise Financial
Control Over Brite USA
63. As early as January 2019, the Brite Group CEO became a primary point of
contact for Brite USA personnel regarding a variety of topics, including Brite USA’s insufficient
cash flow from its advisory business and the need for funding from its new owners.
64. For example, the Brite Group CEO began regularly receiving from Brite USA
requests for direct financial support to cover operating expenses.  The requests typically were
sent by Brite USA’s operations manager and included line-item descriptions of Brite USA’s
anticipated near-term expenses, its cash on hand, and a request for a cash wire in the amount of
the anticipated near-term shortfall.  At the Brite Group CEO’s instruction to do so, Brite USA’s
operations manager copied a Brite Group Parent accountant on the requests.

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65. In response to Brite USA’s funding requests, the Brite Group CEO and/or the
Brite Group Parent’s accountant regularly arranged for sufficient funds to be wired from a bank
account held by one of the Brite Group companies (typically Brite Australia) to Brite USA’s
bank account.
66. Early on, the Brite Group CEO expressed concern over his lack of visibility into
Brite USA’s finances.  For example, on or about March 22, 2019, the Brite Group CEO
responded to a funding request email from Brite USA’s operations manager by stating:
We need the US connected to Xero [the Brite Group Parent’s accounting
system] ASAP.
I need a full run down of costs/income ASAP
No idea what P&L is in the US.
67. Acting on the Brite Group CEO’s directive, Brite USA’s operations manager
provided the information and began making arrangements to grant the Brite Group Parent’s
accountant online access to Brite USA’s bank accounts, its QuickBooks accounting records, and
its payroll system.
68. While Brite USA awaited access to the Brite Group Parent’s Xero accounting
system, Brite USA’s operations manager provided detailed spreadsheets of transactions in Brite
USA’s bank accounts and other financial data to the Brite Group CEO.
69. Brite USA’s operations manager also assured the Brite Group CEO that he would
provide monthly management reports from the Xero accounting system once Brite USA had
access.
70. In late May 2019, the Brite Group CEO sent the Brite Group Parent’s accountant
to New York to review Brite USA’s accounts in person.

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71. By at least June 2019, Brite USA’s operations manager began uploading Brite
USA’s financial information, including bank account transaction and expense information, into
the Brite Group Parent’s Xero accounting system.
72. Brite USA’s requests to the Brite Group Parent for cash infusions to meet
operating expenses continued regularly, typically twice per month, and the Brite Group,
including Brite Australia, has continued to provide funding to Brite USA through the present.
73. These cash infusions have been critical to Brite USA’s ability to meet payroll and
other expenses.
74. Between March 2019 and October 31, 2023, at least $16.9 million was wired from
Brite Australia’s bank accounts to Brite USA’s bank account, and an additional approximately
$2 million was wired from the bank accounts of other Brite Group companies to Brite USA’s
bank account.
3. The Brite Group CEO and the Brite Group Parent Oversaw Brite
USA’s Regulatory Filings and Directed Brite USA to Offer the Brite
Platform
75. Approximately one month after the Brite Group Parent made its initial drawdown
to pay for the Brite USA acquisition, the Brite Group Parent began submitting additional
drawdown requests on the loan agreement to fund further business acquisitions.
76. However, because Brite USA’s advisory clients’ assets had not started moving to
accounts at the Global Broker-Dealer, the Global Broker-Dealer Affiliate expressed frustration
with the slow pace of the asset transfers and repeatedly asked the Brite Group CEO for updates
while considering whether to approve additional drawdown requests.
77. After the Brite Group Parent submitted its second drawdown request to the Global
Broker-Dealer Affiliate on approximately April 16, 2019, to acquire a financial services
company based in the Czech Republic for about $650,000, a representative from the Global

 16
Broker-Dealer Affiliate inquired of the Brite Group CEO and another executive at the Brite
Group Parent (“Brite Group Executive-2”), “Have the [Brite USA] assets moved over to you
guys yet? Let me know.”
78. On April 18, 2019, the Brite Group CEO responded, “We are waiting on updating
the [Commission Form] ADV in the US before moving assets to Brite Advisors.  This will
be finalized by the end of April.”
79. On April 23, 2019, Brite Group Executive-2 responded to the same April 16, 2019
email chain, copying the Brite Group CEO, “We’re in control of [Brite USA] now and the assets
will begin to move once we have the [Global Broker-Dealer] account set up in Hong Kong,
which will start in Q2.”
80. On May 17, 2019, after repeated inquiries by the Brite Group CEO and Brite
Group Executive-2 regarding the status of the Brite Group Parent’s second drawdown request,
the Global Broker-Dealer Affiliate representative responded, “We cannot send the funding until
the assets have moved to the new account.  Let me know if that has happened.”
81. The Brite Group CEO responded the same day:
We didn’t take full control of [Brite USA] until April . . . The ADV is now
under Brite Advisors USA with 420M of AUM [assets under
management].  We need to update the ADV to include [the Global Broker-
Dealer] and our investment portfolios.  This will be finalized by the end of
May and filly [sic] disclosed to clients.  The transfer process then takes
three months and this was made clear during negotiations.  We have lined
up 10M worth of deals including agreeing to buy 220M of AUM in South
Africa this week.
New business is going to [the Global Broker-Dealer] under our Australia
account.  However there is no FX [foreign exchange] facility so very
challenging.
82. On May 23, 2019, the Global Broker-Dealer Affiliate informed the Brite Group
Parent that it would agree to its second drawdown request by saying, “It is moving forward now.

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Will try to get the funds to you as soon as possible.  We are hoping that once you receive the
funds, you will be able to get the AUM moved to your account more quickly than with the last
transaction.”
83. Over the next several months, the Brite Group Parent made additional drawdown
requests to the Global Broker-Dealer Affiliate to fund further acquisitions.
84. The Global Broker-Dealer Affiliate continued to inquire about and express
frustration with the pace of the Brite Group Parent’s transfer of client assets to the Global
Broker-Dealer.
85. The Brite Group CEO and the other Brite Group Executive continued to explain
that the delays were related to Brite USA’s need to revise its Form ADV.    They repeatedly
assured the Global Broker-Dealer Affiliate that it was progressing and that the Brite Group CEO
was personally involved, noting that the Brite Group CEO had travelled to New York in June
2019 to work on Brite USA’s Form ADV in person along with Brite USA’s outside regulatory
counsel, and again in August 2019, to facilitate the transfer of Brite USA client assets to the
Global Broker-Dealer.
86. For example, the Brite Group CEO emailed the Global Broker-Dealer Affiliate on
June 27, 2019, and said, “The ADV for the US has been updated this week to include [the Global
Broker-Dealer].  These are insurance assets and take 3 months to move over.  I am not buying
these assets for the fun of it!  They all move to [the Global Broker-Dealer].  We have a number
of deals going through which I’ve worked on for twelve months plus.”
87. The Global Broker-Dealer Affiliate then approved drawdowns totaling
approximately $1.7 million for the Brite Group Parent to purchase a Malta QROPS trustee and a
UK SIPP trustee in July 2019.

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88. After Brite USA filed an amended Commission Form ADV and ADV Disclosure
Brochure in August 2019, Brite USA began recommending the Brite Platform to clients, and
asset transfers to the Brite Platform began.
4. The Brite Group CEO and the Brite Group Parent Hired Brite USA’s
CEO
89. During late summer and early fall of 2019, the Brite Group CEO had numerous
phone calls with an individual who lived and worked in South Africa and flew to South Africa to
recruit the individual to be Brite USA’s CEO.
90. In November 2019, the Brite Group CEO extended a written job offer to the
individual for the Brite USA CEO position in New York, New York, written on the Brite Group
Parent letterhead, and the Brite Group CEO signed the job offer.
91. The offer included a salary of $10,000 per month, a signing bonus, and the
potential for receiving options in the Brite Group Parent, subject to performance.
92. The individual (“Brite USA Executive-A”) accepted the offer.  Brite USA
Executive-A began working at Brite USA in March 2020 and, after an agreed-upon transition
period, took over as Brite USA’s CEO in June 2020.
93. The Brite Group Parent announced the selection and appointment of Brite USA
Executive-A as the CEO of Brite USA in a March 20, 2020 press release that Brite Group
Executive-1 drafted:
Brite Advisors announced this week that they have appointed [Brite USA
Executive A] as the new CEO of its US operation based in New York....
[Brite  USA  Executive
-
A]  succeeds  [Brite  USA  Executive-B]  who  will
remain with the company until the summer.... The Brite founder and group
CEO [the Brite Group CEO] wanted a well-respected industry leader with
international experience.  ‘We’ve been searching for the right person for a
number of months and [Brite USA Executive-A] was the perfect fit” said
[the Brite Group CEO]....  ‘With our unique offering of best interest of the
client we aim to be the globe’s leading investment firm for UK expats and

 19
[Brite USA Executive A] is a key part in making this happen’ said [the Brite
Group CEO].
94. After joining Brite USA, Brite USA Executive-A regularly communicated   with
the Brite Group CEO, speaking with him an average of twice weekly by telephone.
C. Since 2019, Brite USA Has Violated the Custody Rule
95. Since 2019, Brite USA has had custody of its clients’ assets because Brite
Australia, a “related person” under common control, has acted as a qualified custodian and has
held Brite USA client assets in connection with Brite USA’s advisory services to these clients.
96. However, since 2019, Brite USA has never sought or obtained an internal control
report for Brite Australia prepared by an independent public accountant registered with the
PCAOB.
III. Brite USA Failed to Fully Disclose Risks and Conflicts of Interest Related to the
Brite Platform
A. Brite Australia Used t he Margin Feature in t he Client Omnibus Accounts to
Borrow Millions of Dollars
97. From 2019 until in or about June 2021, the assets of Brite USA clients and of
clients of other entities in the Brite Group were held in a single Client Omnibus Account in the
name of Brite Australia at the Australian subsidiary of the Global Broker-Dealer (the “Original
Omnibus Account”).
98. The Original Omnibus Account and other Client Omnibus accounts subsequently
opened each have a margin feature.
99. These margin features have provided Brite Australia with the ability to use margin
to establish securities positions or to borrow funds, with the margin loan balance secured by all
of the assets held in the Original Omnibus Account and in any other Brite Australia accounts at
the Global Broker-Dealer.

 20
100. The Global Broker-Dealer can liquidate any or all of the assets in the Original
Omnibus Account or any other Brite Australia account at the Global Broker-Dealer at any time
without prior notice if the account does not meet margin requirements specified by the Global
Broker-Dealer.
101. The use of the margin feature in the Client Omnibus Accounts for any purpose
creates a risk for all of Brite USA’s clients with assets on the Brite Platform because all assets in
the Client Omnibus Accounts serve as collateral for the margin loan balance.
102. Any borrowing under the margin feature is in addition to and entirely separate
from the $10 million loan agreement between the Global Broker-Dealer Affiliate and the Brite
Group Parent described in paragraph 59 above.
103. As described in more detail in the paragraphs below, the Brite Group Parent a nd
Brite Australia have used the margin feature on the Original Omnibus Account to withdraw
millions of dollars from the Original Omnibus Account to fund the Brite Group’s operations
worldwide, including Brite USA’s operations.  Brite Australia also purportedly used the margin
feature to fund cash advances Brite Australia offered to Brite USA clients with QROPS and
clients of the other companies within the Brite Group, who incurred “exit fees” from their prior
custodian when switching to the Brite Platform.
104. Brite Australia has used the margin feature in the Client Omnibus Accounts for
operational funding to benefit the Brite Group, including Brite USA — and not to benefit the
clients whose assets have been put at risk.
105. Similarly, a margin balance incurred to fund an exit fee advance to one client —
who otherwise may not have agreed to transfer assets to the Brite Platform — provides no

 21
benefit to clients who did not receive such advances, yet the debt is secured by all of the client
assets held in the Client Omnibus Accounts.
106. Brite USA had a fiduciary duty to disclose the risks and conflicts of interest
alleged above to its advisory clients.
1. Operational Funding for the Brite Group
107. Since at least 2019, Brite USA has received approximately $19 million from Brite
Australia and other companies within the Brite Group to pay its operational expenses.
108. To meet Brite USA’s operational funding needs (and to fund the operations of
other Brite Group companies), Brite Australia incurred a significant margin loan balance on the
Original Omnibus Account.
109. Brite Australia typically did so by using the margin feature and initiating cash
withdrawals from the Original Omnibus Account to Brite Australia’s operations bank accounts,
which were reflected in the Original Omnibus Account as a negative cash position.  Brite
Australia then wired   funds to Brite USA’s bank account after the Brite Group Parent received
and approved a funding request from Brite USA.
110. Brite Australia’s total margin balance in the Original Omnibus Account grew
substantially over time, as depicted below:
Date Gross Client Assets Margin Balance
June 30, 2019 $20.45 million ($2.87 million)
December 31, 2019 $51.05 million ($10.64 million)
June 30, 2020 $94.96 million ($11.09 million)
December 31, 2020 $310.26 million ($27.3 million)
May 31, 2021 $466.29 million ($40.21 million)

 22
111. Brite Australia’s use of the margin feature to fund the operational expenses of the
Brite Group, including Brite USA, primarily drove this margin balance growth.
112. Between October 30, 2019, and June 1, 2021, Brite Australia withdrew over $32
million from the Original Omnibus Account to its business operations bank accounts,
approximately 80% of the total outstanding margin balance of $40.21 million as of May 31,
2021.
2. Advances of “Exit Fees”
113. In addition, Brite Australia purportedly funded cash advances of “exit fees”
incurred by Brite USA clients with QROPS from their prior custodian (described above in
Section I.B.) and by clients of other Brite Group companies by using the margin feature in the
Original Omnibus Account prior to June 2021.
114. Use of the margin feature to fund advances of “exit fees” makes all of the client
assets in the Client Omnibus Accounts —including the assets of clients who did not receive such
advances—collateral for the margin loan balance incurred.
B. Brite USA Was on Notice of Brite Australia’s Margin Borrowing prior to
June 2021 But Failed to Disclose Risks and Conflicts of Interest to Clients
115. On May 7, 2019, in response to Brite USA’s requests for information about the
Brite Platform, the Brite Group Parent provided a copy of Brite Australia’s clearing agreement
with the Global Broker-Dealer to Brite USA’s CEO at the time (“Brite USA Executive-C”).
116. The clearing agreement described margin feature privileges available on the
Original Omnibus Account, including the Global Broker-Dealer’s right to liquidate assets in the
account without prior notice should the account fail to meet its margin requirements.
117. That same day, Brite USA Executive-C emailed the document to other Brite USA
executives, including Brite USA Executive-B, who at that time was Brite USA’s General

 23
Counsel and later served as CEO prior to the appointment of Brite USA Executive-A as CEO in
or around June 2020 as described in paragraph 92 above.
118. However, Brite USA failed to make further inquiries of the Brite Group Parent or
Brite Australia regarding the margin feature and made inaccurate and misleading disclosures to
its clients.
119. Beginning in approximately August 2019, when Brite USA began recommending
the Brite Platform to clients, Brite USA’s Investment Advisory Agreement (“Advisory
Agreement”) with clients at the time included a section with respect to the Brite Platform titled
“Conflicts of Interest”.
120. That section stated that Brite USA “receives or will seek to receive an advance of
its [advisory fee] from [the Brite Group Parent] equal to up to five years’ of annual [advisory
fees] which it would cede to [the Brite Group Parent],” and the section falsely described the
source of the advances as “a credit facility it [the Brite Group Parent] maintains with [the Global
Broker-Dealer Affiliate], an affiliate of [the Global Broker-Dealer].”
121. In fact, the source of funding Brite USA received from the Brite Group Parent
was primarily from Brite Australia incurring a margin loan position on the Original Omnibus
Account holding Brite USA’s own clients’ assets.
122. By incorrectly identifying the source of funding, Brite USA failed to disclose the
risks and conflicts created by the Brite Group Parent and Brite Australia borrowing against Brite
USA’s clients’ assets to fund the operations of the Brite Group, including Brite USA.
123. Similarly, while Brite USA’s Advisory Agreement and Form ADV Brochure
disclosed that Brite Australia had agreed to advance “exit fees” to clients with QROPS who
incurred such fees when switching to the Brite Platform (subject to repayment by the client),

 24
both documents omitted the important information that Brite Australia would fund any such
advances of “exit fees” by incurring a margin loan balance on the Original Omnibus Account
that encumbered all client assets, regardless of whether the client received an advance.
124. On or about July 19, 2020, Brite USA Executive-B emailed Brite Group
Executive-2 attaching Brite USA’s most recent ADV Brochure, dated June 12, 2020, as well as a
separate written set of questions.
125. In his email and the attached set of questions, Brite USA Executive-B sought
answers about conflicts of interest and comments on Brite USA’s existing or draft descriptions of
certain conflicts involving the Brite Platform—including Brite USA’s draft description of the
Brite Group Parent’s use of a credit facility with the Global Broker-Dealer Affiliate to fund exit
fee advances made to Brite USA clients and Brite USA’s current Advisory Agreement disclosure
regarding Brite USA’s potential receipt of an advance of up to five years’ of annual advisory fees
from the Brite Group Parent.
126. In response, on approximately July 21, 2020, Brite Group Executive-2 explained
that Brite USA Executive-B appeared to misunderstand the nature of the Brite Group Parent’s
credit facilities with the Global Broker-Dealer.
127. Brite Group Executive-2 noted that there were two debt structures:  (1) a credit
facility to promote the growth and expansion of the Brite Group that was strictly limited to
spending on acquisitions of firms within the same market sector and (2) a separate “credit facility
on the master account with [the Global Broker-Dealer], where clients cash and assets are
custodied.”  Brite Group Executive-2 noted the credit facility on the client account was to fund
both “exit fee” advances to clients and the advances of advisory fees, and that client repayments
of “exit fee” advances and annual advisory fees “reduce the debt.”  Brite Group Executive-2

 25
added further, “Please note that this is not a margin account” (emphasis in original).
128. Despite describing the client account as “not a margin account,” Brite Group
Executive-2 made clear the existence of a “credit facility on the master account ... where clients
cash and assets are custodied,” i.e., the Original Omnibus Account, which, by his description,
was being used both to fund exit fee advances to clients and advances of up to five years’ of
advisory fees to Brite USA.
129. That same day Brite USA Executive-B forwarded the email to Brite USA
Executive-A (then Brite USA’s CEO) and others.
130. Brite Group Executive-2’s description of the credit facility on the Original
Omnibus Account put Brite USA on notice that the Brite Group Parent, through Brite Australia,
was borrowing against client assets in the Original Omnibus Account.
131. Yet Brite USA made no further inquiries into the nature of that credit facility at
that time, including as to the extent of its use and the collateral.
132. Instead, at some point after receiving Brite Group Executive-2’s July 20, 2020
email, Brite USA decided to simply delete the disclosure described in paragraph 120 above from
the Advisory Agreements entered into with clients.
133. In addition, prior to June 2021, Brite USA did not disclose to its advisory clients
the existence of the margin privileges on the Original Omnibus Account or its use to incur
significant margin loan balances against Brite USA client assets on the Brite Platform.
134. Between August 2019 and May 2021, pursuant to Brite USA recommendations,
Brite USA clients with at least $298 million in SIPP and QROPS assets moved their assets to the
Brite Platform—all of which occurred without full and fair disclosure of the attendant risks and

 26
conflicts of interest described above.
C. Brite USA Is Still Failing to Disclose Certain Risks and Conflicts of Interest
to Its Advisory Clients
135. In early June 2021, Brite Australia began using a new Client Omnibus Account at
the Global Broker-Dealer in the name of Brite Australia (the “New US Omnibus Account”) that
Brite USA claims exclusively holds assets of Brite USA’s clients.
136. Under this new arrangement, Brite USA’s clients’ assets and associated margin
loan balances are purportedly held in the New US Omnibus Account, while assets for clients of
all other Brite Group entities and associated margin loan balances remained in the Original
Omnibus Account.
137. The New US Omnibus Account’s margin loan balance is purportedly limited
solely to the amount of advanced exit fees that is reduced by clients’ monthly repayments.
138. Despite the apparent segregation of Brite USA’s clients’ assets and associated
margin loan balance, this arrangement does not eliminate the risks borne by Brite USA’s
advisory clients.  The Global Broker-Dealer is still entitled to liquidate assets in any of Brite
Australia’s accounts with the Global Broker-Dealer without prior notice if  the Original Omnibus
Account or another Client Omnibus Account fails to meet its margin requirements at any time.
As a result, Brite USA’s clients’ assets in the New US Omnibus Account continue to serve as
collateral for margin loan balances incurred on the Original Omnibus Account.
139. Shortly after the purported June 2021 “segregation” of the New US Omnibus
Account and Original Omnibus Account, Brite USA sent its clients a new disclosure form
entitled “Acknowledgement Of Omnibus Account Usage and Risks.”
140. In this form, Brite USA disclosed, for the first time, that Brite USA client assets
on the Brite Platform had previously been commingled in the Original Omnibus Account with

 27
client assets of other Brite Group companies and that Brite Australia used   margin loans secured
by client assets to fund both exit fee advances and the operations of the Brite Group, including
those of Brite USA.
141. This disclosure described certain risks associated with the use of margin, such as
the fact that assets in any Brite Australia account at the Global Broker-Dealer could be liquidated
to satisfy a margin obligation of another Brite Australia account.  However, the disclosure did
not fully reveal the extent to which margin debt on the Original Omnibus Account had already
funded Brite USA’s operations or the extent of borrowing against the Original Omnibus
Account, did not describe the extent to which Brite USA relied upon the Brite Group Parent and
Brite Australia for ongoing financial support, and did not explain the related conflicts of interest.
142. The disclosure form concluded by stating:  “Brite USA has inquired of [Brite
Australia] in respect of these [Client Omnibus Account] risks and believe that the use of the
[New US Omnibus Account] (including margin) is appropriate, and does not present to its clients
a materially increased risk relative to individual accounts, based on [Brite Australia’s]
representations,” which it listed as including Brite Australia’s segregation of assets and liabilities
to each individual account and that “[Brite Australia] performs reconciliations between account
holdings on the Brite Platform and omnibus accounts each business day.”   However, the
disclosure failed to provide any information to clients relating to the financial condition and
capacity of the Brite Group Parent and Brite Australia to repay the margin debt incurred on the
Original Omnibus Account for operational funding.
143. Moreover, Brite USA failed to disclose information on Brite Australia’s use of
margin in the Original Omnibus Account, which grew rapidly from June 2021 to June 2022, as
depicted in the chart below:

 28
Date
Original Omnibus (Non-Brite USA) New US Omnibus (Brite USA only)
Gross Assets Margin Gross Assets Margin
June 30, 2021 $181.8 million ($43.69 million) $318.15 million  ($10.42 million)
Dec. 31, 2021 $250.04 million ($70.62 million) $391.83 million ($8.76 million)
June 30, 2022 $260.27 million ($88.76 million) $341.64 million ($10.08 million)
144. Because Brite USA’s client assets continued to serve as collateral for margin debt
in all of Brite Australia’s accounts at the Global Broker-Dealer, the risks to Brite USA’s clients
continued to grow along with Brite Australia’s overall margin debt incurred in either of the
Client Omnibus Accounts.
145. Yet Brite USA has continued to recommend the Brite Platform to clients
throughout this time and continued to represent to its clients that Brite USA believes the
arrangement is “appropriate” and does not present “a materially increased risk relative to
individual accounts” for Brite USA clients.
146. Overall margin debt in the Original Omnibus Account dropped substantially
between June 30, 2022, and December 31, 2022, due to two large payments Brite Australia made
using cash in the Original Omnibus Account to pay down the margin loan balance.
147. Brite Australia purportedly further split the Original Omnibus Account beginning
in or about March 2023 by using additional Client Omnibus Accounts to hold certain client
assets previously held in the Original Omnibus Account.
IV. The Australian Commission Obtained a Freeze Order
148. On October 27, 2023, the Australian Commission announced that it had obtained
interim orders from an Australian federal court freezing the funds and assets of Brite Australia.
149. According to the Australian Commission’s announcement, its application for the
orders was made because the Australian Commission is concerned that “the current financial

 29
position of [Brite Australia] is unknown, as [Brite Australia] has failed to lodge with the
[Australian Commission] its financial statements and auditors report for the financial year ended
30 June 2022; and the value of [Brite Australia’s] funds under management has not been
reported by any entity within the Brite Group in an audited balance sheet since December 2019.”
150. The announcement further states that “[the Australian Commission] sought the
orders to help protect the beneficiaries of the assets under management by [Brite Australia],
including the beneficiaries of those who have their pensions or superannuation funds invested on
the Brite Platform.”
151. The Australian Commission subsequently announced that, on November 9, 2023,
the Australian federal court appointed investigative accountants to Brite Australia “to investigate
the financial position of [Brite Australia], including client funds under its management, as well
as provide a report to the Court and to [the Australian Commission],” and that “[t]he asset
preservation orders remain in place.”
FIRST CLAIM FOR RELIEF
Violations of Advisers Act Section 206(2)
152. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 20, 31 through 47, 63 through 74, and 97 through 151.
153. At all relevant times, Brite USA was an investment adviser under Advisers Act
Section 202(11) [15 U.S.C. § 80b-2(11)].
154. Brite USA, by use of the mails or any means or instrumentality of interstate
commerce, directly or indirectly has knowingly, recklessly, or negligently engaged in one or
more transactions, practices, and courses of business which operated or would operate as a fraud
or deceit upon any client or prospective client.

 30
155. By reason of the foregoing, Brite USA, directly or indirectly, singly or in concert,
has violated and, unless enjoined, will again violate Advisers Act Section 206(2) [15 U.S.C. §
80b-6(2)].
SECOND CLAIM FOR RELIEF
Violations of Advisers Act Section 206(4) and Rule 206(4)-2 Thereunder

156. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 96.
157. At all relevant times, Brite USA has been an investment adviser registered with
the Commission under Section 203 of the Advisers Act [15 U.S.C. § 80b-3].
158. At all relevant times, Brite USA has had custody of its advisory clients’ assets under
the definition set forth in Rule 206(4)-2(d)(2) [17 C.F.R. § 275.206(4)-2(d)(2)].
159. At all relevant times, Brite Australia has been a related person of Brite USA and
maintained funds and securities of Brite USA clients in connection with Brite USA’s advisory
services to clients.
160. Since at least August 2019, Brite USA has failed to obtain, or receive from Brite
Australia, any   internal control reports that comply   with the requirements of Rule 206(4)-2(a)(6)(ii)
[17 C.F.R. § 275.206(4)-2(a)(6)(2)].
161. By  reason  of  the  foregoing,  Brite  USA,  directly  or  indirectly,  has  violated  and
unless enjoined will again violate Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule
206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:

 31
I.
Permanently enjoining Brite USA and its agents, servants, employees and attorneys and
all persons in active concert or participation with any of them from violating, directly or
indirectly, Advisers Act Sections 206(2) and 206(4) [15 U.S.C. §§ 80b-6(2) & 80b-6(4)] and
Rule 206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].
II.
Ordering Brite USA to pay civil monetary penalties under Advisers Act Section 209(e)
[15 U.S.C. § 80b-9(e)]; and
III.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND

The Commission demands a trial by jury.

Dated:  New York, New York
November 21, 2023

  /s/ Antonia M. Apps
ANTONIA M. APPS
REGIONAL DIRECTOR
Sheldon L. Pollock
Wendy B. Tepperman
Travis Hill
Jonathan M. Grant
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004-2616
212-336-9135 (Hill)
[email protected]

ANTONIA M. APPS 
REGIONAL DIRECTOR 
Sheldon L. Pollock 
Wendy B. Tepperman 
Travis Hill 
Jonathan M. Grant   
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616 
212-336-9135 (Hill) 
[email protected] 
 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
BRITE ADVISORS USA, INC.,    
  
                                             Defendant 
 
 
 

 
 
COMPLAINT 

   
23 Civ. 10212 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendant Brite Advisors USA, Inc. (“Brite USA” or “Defendant”), alleges as follows: 

SUMMARY 

1. Brite USA — a Commission-registered investment adviser with nearly 

$400 million in client assets under management maintained by Brite Advisors Pty Ltd. (“Brite 

Australia”) — has failed and continues to fail to comply with the Commission’s “Custody Rule,” 

which, to ensure the safety of client assets, requires an annual report from an independent public 

accountant of Brite Australia’s internal controls.  In addition, Brite USA has violated and 

Case 1:23-cv-10212   Document 1   Filed 11/21/23   Page 1 of 31



 2 

continues to violate its fiduciary duty to its advisory clients to fully disclose conflicts of interest 

and risks to client assets created by Brite Australia borrowing tens of millions of dollars in loans 

backed (collateralized) by Brite USA’s client assets.   

2. Brite USA and Brite Australia are under common control.  For purposes of the 

Custody Rule, Brite USA therefore has custody of Brite USA client funds and securities 

maintained by Brite Australia, and Brite USA thus must comply with the Custody Rule.   

3. From 2019 to present (the “Relevant Period”), Brite USA has failed to comply 

with the Custody Rule’s requirement that it obtain or receive from Brite Australia an annual 

internal control report — an important safeguard that verifies client assets — from an 

independent public accountant registered with the Public Company Accounting Oversight Board 

(“PCAOB”), in violation of Section 206(4) of the Investment Advisers Act of 1940 (“Advisers 

Act”) and Rule 206(4)-2.  

4. In addition, Brite USA has received millions of dollars in operational funding 

arranged by Brite Australia’s parent company, Brite Advisory Group Limited (the “Brite Group 

Parent”), during the Relevant Period.  This funding, in the form of regular cash wires to Brite 

USA from Brite Australia and other entities controlled by, or under common control with, the 

Brite Group Parent (together, the “Brite Group”), has been critical to Brite USA’s ability to meet 

operating expenses.   

5. Brite USA’s reliance on the Brite Group for funding creates conflicts of interest 

that Brite USA, as an investment adviser, has a fiduciary duty to fully and fairly disclose to its 

advisory clients.  Brite USA has failed to do so.    

6. Moreover, Brite USA has failed to comply with its fiduciary duty to fully disclose 

that, during the Relevant Period, a primary source of the funding to cover its operating expenses 

Case 1:23-cv-10212   Document 1   Filed 11/21/23   Page 2 of 31



 3 

has been margin loans or other debt secured by client assets, including the assets of Brite USA 

clients.  Brite Australia’s use of client assets as collateral presents additional risks and conflicts 

of interest that should have been disclosed.   

7. In failing to fully disclose these related risks and conflicts of interest, Brite USA 

breached its fiduciary duty to its advisory clients in violation of Advisers Act Section 206(2).  

8. In October 2023, Brite Australia’s Australian regulator announced that it had 

sought and obtained an order from an Australian federal court freezing Brite Australia’s assets in 

part because “the value of [Brite Australia’s] funds under management has not been reported by 

any entity within the Brite Group in an audited balance sheet since December 2019.” 

VIOLATIONS 

9. By virtue of the foregoing conduct and as alleged further herein, Defendant has 

violated Sections 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 80b-6(2) and 80b-6(4)] 

and Rule 206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].  

10. Unless Defendant is restrained and enjoined, Defendant will engage in the acts, 

practices, transactions, and courses of business set forth in this Complaint or in acts, practices, 

transactions, and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

11. The Commission brings this action pursuant to the authority conferred upon it by 

Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-9(e)].  

12. The Commission seeks a final judgment: (a) permanently enjoining Defendant 

from violating the federal securities laws and rules this Complaint alleges it has violated; (b) 

ordering Defendant to pay civil money penalties pursuant to Advisers Act Section 209(e) [15 

Case 1:23-cv-10212   Document 1   Filed 11/21/23   Page 3 of 31



 4 

U.S.C. § 80b-9(e)]; and (c) ordering any other and further relief the Court may deem just and 

proper.  

JURISDICTION AND VENUE 

13. This Court has jurisdiction over this action pursuant to Advisers Act Section 214 

[15 U.S.C. § 80b-14].  

14. Defendant, directly and indirectly, has made use of the means or instrumentalities 

of interstate commerce or of the mails in connection with the transactions, acts, practices, and 

courses of business alleged herein. 

15. Venue lies in this District under Advisers Act Section 214 [15 U.S.C. § 80b-14]. 

Defendant’s principal office and principal place of business is in the Southern District of New 

York, Defendant conducts business in this District and certain of the acts, practices, transactions, 

and courses of business alleged in this Complaint occurred within this District. 

DEFENDANT 

16. Brite USA (f/k/a deVere USA, Inc., prior to January 2019) is a Florida 

corporation with its principal place of business in New York, New York.  Brite USA has been 

registered with the Commission as an investment adviser since 2013.  In its 2022 annual 

updating Form ADV amendment filed with the Commission on March 30, 2023, Brite USA 

reported regulatory assets under management of approximately $468 million.  On June 4, 2018, 

while the firm was named deVere USA, Inc., the Commission instituted settled administrative 

and cease-and-desist proceedings against the firm finding violations of Sections 206(1), 206(2), 

207 and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder relating to its failure to 

disclose compensation obtained from third-party product and service providers it recommended 

to clients and other violations.  The firm consented to the order without admitting or denying the 

Case 1:23-cv-10212   Document 1   Filed 11/21/23   Page 4 of 31



 5 

Commission’s findings.  In the Matter of deVere USA, Inc., Adv. Act Rel. No. 4993 (June 4, 

2018).   

OTHER RELEVANT INDIVIDUALS AND ENTITIES 

17. Brite Group Parent is a Hong Kong company and at all relevant times has been 

the parent company of Brite Australia.  The Brite Group Parent also controls or is under common 

control with the Brite Group, which operates worldwide as investment advisory and pension 

administration firms.   

18. Brite Australia is an Australian financial services firm with its registered 

principal office in Sydney, Australia, and is a direct, wholly-owned subsidiary of the Brite Group 

Parent.  Brite Australia is registered with and licensed by the Australian Securities & 

Investments Commission (the “Australian Commission”) as a financial services business.   

19. Brite Group CEO, age 57, is a Hong Kong resident, and is the founder and chief 

executive officer of the Brite Group Parent.   

20. Brite Group Executive-1, age 56, is a resident of the United Kingdom.  At all 

relevant times, Brite Group Executive-1 has been the Chief Marketing Officer of the Brite Group 

Parent and since at least August 30, 2019, has served as a Director of the Brite Group Parent.  

Brite USA has reported since January 2019 that Brite Group Executive-1 is a Director of Brite 

USA and the direct or indirect sole owner of Brite USA. 

BACKGROUND ON THE CUSTODY RULE 

21. In Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)], Congress made it 

unlawful for any investment adviser to “engage in any act, practice, or course of business which 

is fraudulent, deceptive, or manipulative” using means of interstate commerce.  Congress further 

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directed the Commission, through “rules and regulations,” to “define, and prescribe means 

reasonably designed to prevent, such” fraudulent, deceptive, or manipulative conduct.  

22. In 1962, the Commission adopted Rule 206(4)-2 under the Advisers Act [17 

C.F.R. § 275.206(4)-2], known as the “Custody Rule,” to require investment advisers who have 

custody of client funds or securities “to maintain them in such a way that they will be insulated 

from and not be jeopardized by financial reverses, including insolvency, of the investment 

adviser.”  See 27 Fed. Reg. 2149 (Mar. 6, 1962), available at 

https://www.govinfo.gov/content/pkg/FR-1962-03-06/pdf/FR-1962-03-06.pdf.  

23. Effective in 2010, the Commission amended the Custody Rule to “provide for a 

more robust set of controls over [investment adviser] client assets designed to prevent those 

assets from being lost, misused, misappropriated, or subject to advisers’ financial reverses.” See 

75 Fed. Reg. 1456, at 1457 (Jan. 11, 2010), available at 

https://www.govinfo.gov/content/pkg/FR-2010-01-11/pdf/2010-18.pdf.  

24. Under the Custody Rule, it is a fraudulent, deceptive, or manipulative act, practice 

or course of business for a registered investment adviser to have custody of its clients’ funds or 

securities unless it fully complies with all requirements of the Custody Rule.   

25. For purposes of the Custody Rule, an investment adviser has “custody” if (1) it 

holds, directly or indirectly, clients’ funds or securities, or (2) has authority to obtain possession 

of them, or (3) if a “related person” holds the clients’ funds or securities, or has authority to 

obtain them, in connection with the investment adviser’s services.  17 C.F.R. § 275.206(4)-

2(d)(2).   

26. The Custody Rule defines a “related person” to “mean[] any person, directly or 

indirectly, controlling or controlled by you, and any person that is under common control with 

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you.”  17 C.F.R. § 275.206(4)-2(d)(7).  Under the Advisers Act, “person” means a natural person 

or a company.  15 U.S.C. § 80b-2(a)(16). 

27. The Custody Rule defines “control” to mean “the power, directly or indirectly, to 

direct the management or policies of a person, whether through ownership of securities, by 

contract or otherwise.”  17 C.F.R. § 275. 206(4)-2(d)(1).  The rule further specifies that “[e]ach 

of your firm’s officers, partners, or directors exercising executive responsibility (or persons 

having similar status or functions) is presumed to control your firm.”  17 C.F.R. § 275. 206(4)-

2(d)(1)(i).    

28. If an investment adviser has custody of client assets because a related company 

maintains the client assets as a qualified custodian, the Custody Rule requires the investment 

adviser to obtain— within six months of becoming subject to the requirement and after that at 

least once every year — an internal control report of the related company’s custody controls 

prepared by an independent public accountant.  17 C.F.R. § 275.206(4)-2(a)(6)(ii).   

29. The Custody Rule further requires that the internal control report include an 

opinion as to whether controls have been placed in operation as of a specific date and are 

suitably designed and are operating effectively to meet control objectives relating to custodial 

services, including the safeguarding of funds and securities held on the clients’ behalf.  The 

independent public accountant must verify that the funds and securities are reconciled to a 

custodian other than the related company.  17 C.F.R. § 275.206(4)-2(a)(6)(ii).  Put another way, 

the independent public accountant must confirm or test that the related company’s books and 

records of client funds and securities match what is reported in accounts by unaffiliated entities, 

such as an unaffiliated broker.  

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30. In addition, the Custody Rule requires that the independent public accountant who 

prepares the internal control report must be registered with, and subject to regular inspection by, 

the PCAOB.  17 C.F.R. § 275.206(4)-2(a)(6)(ii)(C).   

FACTS 

I. Background  

A. Brite USA’s Investment Advisory Business  

31. During the Relevant Period, Brite USA’s clients have primarily consisted of 

United Kingdom (“U.K.”) expatriates residing in the United States who previously held 

employment-based U.K. pensions.    

32. During the Relevant Period, Brite USA recommended to prospective advisory 

clients that they transfer their employment-based U.K. pension assets to a self-directed U.K. 

personal pension plan known as a Self-Invested Personal Pension (“SIPP”), with Brite USA 

serving as the investment adviser providing ongoing investment advice to the clients.   

33. Brite USA clients pay a one-time flat fee to Brite USA upon agreeing to the SIPP 

transfer and an annual advisory fee to Brite USA of 1% of assets under management.   

34. The Brite USA client SIPPs are administered by U.K. trustee companies, and 

there is a separate arrangement with a custodian firm, such as a broker or insurance company, 

that holds the client assets and provides securities trade execution.     

35. During the Relevant Period, in addition to advising SIPP clients, Brite USA has 

also advised clients who previously transferred their employment-based U.K. pensions to 

offshore pensions, known in the U.K. as Qualifying Recognized Overseas Pension Schemes 

(“QROPS”), that Brite USA recommended prior to April 2017 while operating under the deVere 

USA name.  

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36. QROPS are structurally similar to SIPPs.  The Brite USA client QROPS are 

administered by trustee companies based outside of the U.K.  The custodian firms that Brite 

USA had previously recommended to these advisory clients were companies that typically 

charged such clients “establishment” fees of 1.0% to 1.1% per year over a required 10-year term 

in addition to other account and trade charges.  As a result, a QROPS client who elected to 

change custodians prior to the end of the required 10-year term incurred an “exit fee” equal to 

the full amount remaining to be paid over the 10-year term.   

B. The Brite Platform and the Exit Fees 

37. In or about August 2019, Brite USA began recommending to new clients and 

existing clients with SIPPs and QROPS that they move their assets to the “Brite Platform,” 

which primarily would function as the custodian firm for Brite USA’s clients.   

38. During the Relevant Period, the Brite USA client SIPP or QROPS assets have 

been held and traded by Brite Australia in client omnibus accounts (“Client Omnibus Accounts”) 

– meaning accounts that hold the assets of multiple clients.  The Client Omnibus Accounts are in 

the name of Brite Australia and are held at the Australian subsidiary of a holding company with 

broker-dealer operating subsidiaries in multiple jurisdictions worldwide (the “Global Broker-

Dealer”).     

39. Brite Australia is responsible for entering trades on behalf of the client SIPP or 

QROPS and transferring funds into and out of the Client Omnibus Accounts using the Global 

Broker-Dealer’s systems.   

40. The Global Broker-Dealer and its Australian subsidiary do not know the identities 

of the underlying clients or their individual holdings within the Client Omnibus Accounts.   

41. Brite Australia, the holder of the Client Omnibus Accounts, is responsible for 

recordkeeping as to the allocation of the funds and securities held in the Client Omnibus 

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Accounts and for reporting holdings and transactions to each underlying advisory client, 

including for Brite USA clients, and their respective SIPP or QROPS trustee.   

42. When a Brite USA client agrees to Brite USA’s recommendation to move their 

SIPP or QROPS assets to the Brite Platform, the client’s existing custodian typically liquidates 

any securities positions, deducts any applicable “exit fees” and/or other charges, and wires the 

remaining cash proceeds to the client’s SIPP or QROPS trustee.   

43. The SIPP or QROPS trustee in turn wires that amount to Brite Australia’s 

designated client bank account in Australia, where it is held before being transferred to the Client 

Omnibus Account for investing and custody.   

44. Similarly, when a Brite USA client requests a withdrawal, or withdrawals are 

needed to pay certain trustee fees a client has incurred, Brite Australia wires the funds from the 

Client Omnibus Account to Brite Australia’s client bank account and then wires the funds to the 

SIPP or QROPS trustee for further distribution.   

45. During the Relevant Period, the Brite Group CEO and his wife were authorized 

persons — meaning they had the authority to withdraw funds or take other account actions — on 

the relevant Brite Australia bank accounts.   

46. Because Brite USA’s QROPS clients would incur “exit fees” equal to the full 

amount remaining to be paid over the 10-year term for “establishment fees” by their existing 

custodians (as described in paragraph 36) if they switched custodians, when Brite USA began 

recommending that QROPS clients switch to the Brite Platform, Brite USA stated that Brite 

Australia would advance cash to those clients in an amount equal to their exit fee.  In turn, the 

client would agree to repay the amount advanced in monthly increments without interest over a 

period of up to 10 years.   

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47. Brite USA represented that, by using this method, the client’s existing QROPS 

assets would be fully invested on the Brite Platform, subject to the client’s repayment obligation.   

II. Brite USA, Brite Australia and the Brite Group Parent Are Under Common 
Control for Purposes of the Custody Rule   

A. Brite Group Executive-1’s Roles at Brite USA and the Brite Group Parent 
Establish Common Control 

48. Brite Group Executive-1 has been the sole Director of Brite USA since at least 

March 2019.    

49. From February 2019 until February 2023, Brite USA stated in all of its Form 

ADV filings with the Commission that Brite Group Executive-1 indirectly owned Brite USA 

through his sole ownership, since January 2019, of a U.K. entity currently named BAH 2021 Ltd. 

(“BAH 2021”).  Brite USA described BAH 2021 as its sole shareholder in the same Form ADV 

filings.    

50. On January 3, 2023, BAH 2021 updated its U.K. corporate records to reflect that, 

as of December 8, 2022, BAH 2021’s owner changed from Brite Group Executive-1 to a British 

Virgin Islands entity named Brite Advisory Holdings Limited, an entity for which the Brite 

Group CEO is a controlling person.   

51. On February 14, 2023, Brite USA filed a Form ADV amendment deleting BAH 

2021 as its direct owner and asserting that Brite Group Executive-1 had been the direct and sole 

owner of Brite USA since January 2019.   

52. At all relevant times, as alleged in paragraph 20 above, Brite Group Executive-1 

has also served as the Chief Marketing Officer of the Brite Group Parent.  In addition, since at 

least August 2019, Brite Group Executive-1 has served as one of the three or four Directors of 

the Brite Group Parent.   

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53. In these roles, Brite Group Executive-1 has participated in regular meetings with 

other managers of the Brite Group Parent, including the Brite Group CEO.   

54. As alleged in paragraph 18 above, Brite Australia is a direct, wholly-owned 

subsidiary of the Brite Group Parent. 

B. The Brite Group CEO and The Brite Group Parent Also Control Brite USA   

1. The Brite Group Parent Arranged and Funded the Acquisition of 
Brite USA  

55. In 2018 and 2019, the Brite Group Parent, led by the Brite Group CEO, embarked 

on a plan to expand the Brite Group’s business globally, primarily through acquisitions of other 

investment advisory businesses and related support businesses, with a focus on U.K. expatriate 

clients with U.K. pension assets.   

56. To fund the expansion, the Brite Group CEO approached an affiliate of the Global 

Broker-Dealer (the “Global Broker-Dealer Affiliate”), seeking a $10 million credit facility for 

purposes of making acquisitions.   

57. To persuade the Global Broker-Dealer Affiliate to agree to the loan, the Brite 

Group CEO promised that he would move client assets managed by the target companies to 

brokerage accounts at the Global Broker-Dealer as acquisitions were made.   

58. The Brite Group CEO specifically told the Global Broker-Dealer Affiliate that 

Brite USA (then named deVere USA, Inc.) had over $500 million in assets under management 

that would be moved to the Global Broker-Dealer after the acquisition.   

59. On approximately March 15, 2019, the Global Broker-Dealer Affiliate and the 

Brite Group Parent executed an agreement for a loan of up to $10 million for the Brite Group 

Parent to make acquisitions.   

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60. The terms of the loan provided that the Global Broker-Dealer Affiliate would 

review each proposed acquisition and determine whether to approve it before permitting the 

Brite Group Parent to draw down on the loan.   

61. The loan agreement was also supported by a “Subsidiary Guarantee Agreement,” 

also dated March 15, 2019, entered into with various Brite-named entities, including BAH 2021 

(then named Brite Advisors Limited).  The Brite Group CEO had previously represented to the 

Global Broker-Dealer Affiliate that BAH 2021 was the parent company of Brite USA, and Brite 

Group Executive-1 signed the “Subsidiary Guarantee Agreement” on behalf of BAH 2021 and 

certain other entities on that agreement.   

62. On approximately March 18, 2019, the Global Broker-Dealer Affiliate approved 

the Brite Group Parent’s first drawdown request on the loan for $3.96 million, the acquisition 

price of Brite USA.  The Brite Group CEO signed the drawdown request on the Brite Group 

Parent’s behalf.   

2. The Brite Group CEO and the Brite Group Parent Exercise Financial 
Control Over Brite USA  

63. As early as January 2019, the Brite Group CEO became a primary point of 

contact for Brite USA personnel regarding a variety of topics, including Brite USA’s insufficient 

cash flow from its advisory business and the need for funding from its new owners.   

64. For example, the Brite Group CEO began regularly receiving from Brite USA 

requests for direct financial support to cover operating expenses.  The requests typically were 

sent by Brite USA’s operations manager and included line-item descriptions of Brite USA’s 

anticipated near-term expenses, its cash on hand, and a request for a cash wire in the amount of 

the anticipated near-term shortfall.  At the Brite Group CEO’s instruction to do so, Brite USA’s 

operations manager copied a Brite Group Parent accountant on the requests.    

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65. In response to Brite USA’s funding requests, the Brite Group CEO and/or the 

Brite Group Parent’s accountant regularly arranged for sufficient funds to be wired from a bank 

account held by one of the Brite Group companies (typically Brite Australia) to Brite USA’s 

bank account.   

66. Early on, the Brite Group CEO expressed concern over his lack of visibility into 

Brite USA’s finances.  For example, on or about March 22, 2019, the Brite Group CEO 

responded to a funding request email from Brite USA’s operations manager by stating:   

We need the US connected to Xero [the Brite Group Parent’s accounting 
system] ASAP. 

I need a full run down of costs/income ASAP   

No idea what P&L is in the US.  

67. Acting on the Brite Group CEO’s directive, Brite USA’s operations manager 

provided the information and began making arrangements to grant the Brite Group Parent’s 

accountant online access to Brite USA’s bank accounts, its QuickBooks accounting records, and 

its payroll system.   

68. While Brite USA awaited access to the Brite Group Parent’s Xero accounting 

system, Brite USA’s operations manager provided detailed spreadsheets of transactions in Brite 

USA’s bank accounts and other financial data to the Brite Group CEO.   

69. Brite USA’s operations manager also assured the Brite Group CEO that he would 

provide monthly management reports from the Xero accounting system once Brite USA had 

access.   

70. In late May 2019, the Brite Group CEO sent the Brite Group Parent’s accountant 

to New York to review Brite USA’s accounts in person.   

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71. By at least June 2019, Brite USA’s operations manager began uploading Brite 

USA’s financial information, including bank account transaction and expense information, into 

the Brite Group Parent’s Xero accounting system.   

72. Brite USA’s requests to the Brite Group Parent for cash infusions to meet 

operating expenses continued regularly, typically twice per month, and the Brite Group, 

including Brite Australia, has continued to provide funding to Brite USA through the present.   

73. These cash infusions have been critical to Brite USA’s ability to meet payroll and 

other expenses.   

74. Between March 2019 and October 31, 2023, at least $16.9 million was wired from 

Brite Australia’s bank accounts to Brite USA’s bank account, and an additional approximately 

$2 million was wired from the bank accounts of other Brite Group companies to Brite USA’s 

bank account.   

3. The Brite Group CEO and the Brite Group Parent Oversaw Brite 
USA’s Regulatory Filings and Directed Brite USA to Offer the Brite 
Platform 

75. Approximately one month after the Brite Group Parent made its initial drawdown 

to pay for the Brite USA acquisition, the Brite Group Parent began submitting additional 

drawdown requests on the loan agreement to fund further business acquisitions.    

76. However, because Brite USA’s advisory clients’ assets had not started moving to 

accounts at the Global Broker-Dealer, the Global Broker-Dealer Affiliate expressed frustration 

with the slow pace of the asset transfers and repeatedly asked the Brite Group CEO for updates 

while considering whether to approve additional drawdown requests.   

77. After the Brite Group Parent submitted its second drawdown request to the Global 

Broker-Dealer Affiliate on approximately April 16, 2019, to acquire a financial services 

company based in the Czech Republic for about $650,000, a representative from the Global 

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Broker-Dealer Affiliate inquired of the Brite Group CEO and another executive at the Brite 

Group Parent (“Brite Group Executive-2”), “Have the [Brite USA] assets moved over to you 

guys yet? Let me know.”   

78. On April 18, 2019, the Brite Group CEO responded, “We are waiting on updating 

the [Commission Form] ADV in the US before moving assets to Brite Advisors.  This will 

be finalized by the end of April.” 

79. On April 23, 2019, Brite Group Executive-2 responded to the same April 16, 2019 

email chain, copying the Brite Group CEO, “We’re in control of [Brite USA] now and the assets 

will begin to move once we have the [Global Broker-Dealer] account set up in Hong Kong, 

which will start in Q2.”   

80. On May 17, 2019, after repeated inquiries by the Brite Group CEO and Brite 

Group Executive-2 regarding the status of the Brite Group Parent’s second drawdown request, 

the Global Broker-Dealer Affiliate representative responded, “We cannot send the funding until 

the assets have moved to the new account.  Let me know if that has happened.”   

81. The Brite Group CEO responded the same day:   

We didn’t take full control of [Brite USA] until April . . . The ADV is now 
under Brite Advisors USA with 420M of AUM [assets under 
management].  We need to update the ADV to include [the Global Broker-
Dealer] and our investment portfolios.  This will be finalized by the end of 
May and filly [sic] disclosed to clients.  The transfer process then takes 
three months and this was made clear during negotiations.  We have lined 
up 10M worth of deals including agreeing to buy 220M of AUM in South 
Africa this week.   

New business is going to [the Global Broker-Dealer] under our Australia 
account.  However there is no FX [foreign exchange] facility so very 
challenging.  

82. On May 23, 2019, the Global Broker-Dealer Affiliate informed the Brite Group 

Parent that it would agree to its second drawdown request by saying, “It is moving forward now.  

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Will try to get the funds to you as soon as possible.  We are hoping that once you receive the 

funds, you will be able to get the AUM moved to your account more quickly than with the last 

transaction.”   

83. Over the next several months, the Brite Group Parent made additional drawdown 

requests to the Global Broker-Dealer Affiliate to fund further acquisitions.   

84. The Global Broker-Dealer Affiliate continued to inquire about and express 

frustration with the pace of the Brite Group Parent’s transfer of client assets to the Global 

Broker-Dealer.  

85. The Brite Group CEO and the other Brite Group Executive continued to explain 

that the delays were related to Brite USA’s need to revise its Form ADV.  They repeatedly 

assured the Global Broker-Dealer Affiliate that it was progressing and that the Brite Group CEO 

was personally involved, noting that the Brite Group CEO had travelled to New York in June 

2019 to work on Brite USA’s Form ADV in person along with Brite USA’s outside regulatory 

counsel, and again in August 2019, to facilitate the transfer of Brite USA client assets to the 

Global Broker-Dealer.   

86. For example, the Brite Group CEO emailed the Global Broker-Dealer Affiliate on 

June 27, 2019, and said, “The ADV for the US has been updated this week to include [the Global 

Broker-Dealer].  These are insurance assets and take 3 months to move over.  I am not buying 

these assets for the fun of it!  They all move to [the Global Broker-Dealer].  We have a number 

of deals going through which I’ve worked on for twelve months plus.”   

87. The Global Broker-Dealer Affiliate then approved drawdowns totaling 

approximately $1.7 million for the Brite Group Parent to purchase a Malta QROPS trustee and a 

UK SIPP trustee in July 2019.   

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88. After Brite USA filed an amended Commission Form ADV and ADV Disclosure 

Brochure in August 2019, Brite USA began recommending the Brite Platform to clients, and 

asset transfers to the Brite Platform began.   

4. The Brite Group CEO and the Brite Group Parent Hired Brite USA’s 
CEO 

89. During late summer and early fall of 2019, the Brite Group CEO had numerous 

phone calls with an individual who lived and worked in South Africa and flew to South Africa to 

recruit the individual to be Brite USA’s CEO.   

90. In November 2019, the Brite Group CEO extended a written job offer to the 

individual for the Brite USA CEO position in New York, New York, written on the Brite Group 

Parent letterhead, and the Brite Group CEO signed the job offer.   

91. The offer included a salary of $10,000 per month, a signing bonus, and the 

potential for receiving options in the Brite Group Parent, subject to performance.   

92. The individual (“Brite USA Executive-A”) accepted the offer.  Brite USA 

Executive-A began working at Brite USA in March 2020 and, after an agreed-upon transition 

period, took over as Brite USA’s CEO in June 2020.   

93. The Brite Group Parent announced the selection and appointment of Brite USA 

Executive-A as the CEO of Brite USA in a March 20, 2020 press release that Brite Group 

Executive-1 drafted:   

Brite Advisors announced this week that they have appointed [Brite USA 
Executive A] as the new CEO of its US operation based in New York…. 
[Brite USA Executive-A] succeeds [Brite USA Executive-B] who will 
remain with the company until the summer…. The Brite founder and group 
CEO [the Brite Group CEO] wanted a well-respected industry leader with 
international experience.  ‘We’ve been searching for the right person for a 
number of months and [Brite USA Executive-A] was the perfect fit” said 
[the Brite Group CEO]….  ‘With our unique offering of best interest of the 
client we aim to be the globe’s leading investment firm for UK expats and 

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[Brite USA Executive A] is a key part in making this happen’ said [the Brite 
Group CEO].   

94. After joining Brite USA, Brite USA Executive-A regularly communicated with 

the Brite Group CEO, speaking with him an average of twice weekly by telephone.  

C. Since 2019, Brite USA Has Violated the Custody Rule 

95. Since 2019, Brite USA has had custody of its clients’ assets because Brite 

Australia, a “related person” under common control, has acted as a qualified custodian and has 

held Brite USA client assets in connection with Brite USA’s advisory services to these clients. 

96. However, since 2019, Brite USA has never sought or obtained an internal control 

report for Brite Australia prepared by an independent public accountant registered with the 

PCAOB.   

III. Brite USA Failed to Fully Disclose Risks and Conflicts of Interest Related to the 
Brite Platform 

A. Brite Australia Used the Margin Feature in the Client Omnibus Accounts to 
Borrow Millions of Dollars 

97. From 2019 until in or about June 2021, the assets of Brite USA clients and of 

clients of other entities in the Brite Group were held in a single Client Omnibus Account in the 

name of Brite Australia at the Australian subsidiary of the Global Broker-Dealer (the “Original 

Omnibus Account”).   

98. The Original Omnibus Account and other Client Omnibus accounts subsequently 

opened each have a margin feature.   

99. These margin features have provided Brite Australia with the ability to use margin 

to establish securities positions or to borrow funds, with the margin loan balance secured by all 

of the assets held in the Original Omnibus Account and in any other Brite Australia accounts at 

the Global Broker-Dealer.  

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100. The Global Broker-Dealer can liquidate any or all of the assets in the Original 

Omnibus Account or any other Brite Australia account at the Global Broker-Dealer at any time 

without prior notice if the account does not meet margin requirements specified by the Global 

Broker-Dealer.   

101. The use of the margin feature in the Client Omnibus Accounts for any purpose 

creates a risk for all of Brite USA’s clients with assets on the Brite Platform because all assets in 

the Client Omnibus Accounts serve as collateral for the margin loan balance.   

102. Any borrowing under the margin feature is in addition to and entirely separate 

from the $10 million loan agreement between the Global Broker-Dealer Affiliate and the Brite 

Group Parent described in paragraph 59 above.   

103. As described in more detail in the paragraphs below, the Brite Group Parent and 

Brite Australia have used the margin feature on the Original Omnibus Account to withdraw 

millions of dollars from the Original Omnibus Account to fund the Brite Group’s operations 

worldwide, including Brite USA’s operations.  Brite Australia also purportedly used the margin 

feature to fund cash advances Brite Australia offered to Brite USA clients with QROPS and 

clients of the other companies within the Brite Group, who incurred “exit fees” from their prior 

custodian when switching to the Brite Platform.   

104. Brite Australia has used the margin feature in the Client Omnibus Accounts for 

operational funding to benefit the Brite Group, including Brite USA — and not to benefit the 

clients whose assets have been put at risk.   

105. Similarly, a margin balance incurred to fund an exit fee advance to one client — 

who otherwise may not have agreed to transfer assets to the Brite Platform — provides no 

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 21 

benefit to clients who did not receive such advances, yet the debt is secured by all of the client 

assets held in the Client Omnibus Accounts.   

106. Brite USA had a fiduciary duty to disclose the risks and conflicts of interest 

alleged above to its advisory clients.  

1. Operational Funding for the Brite Group  

107. Since at least 2019, Brite USA has received approximately $19 million from Brite 

Australia and other companies within the Brite Group to pay its operational expenses.   

108. To meet Brite USA’s operational funding needs (and to fund the operations of 

other Brite Group companies), Brite Australia incurred a significant margin loan balance on the 

Original Omnibus Account.   

109. Brite Australia typically did so by using the margin feature and initiating cash 

withdrawals from the Original Omnibus Account to Brite Australia’s operations bank accounts, 

which were reflected in the Original Omnibus Account as a negative cash position.  Brite 

Australia then wired funds to Brite USA’s bank account after the Brite Group Parent received 

and approved a funding request from Brite USA.   

110. Brite Australia’s total margin balance in the Original Omnibus Account grew 

substantially over time, as depicted below: 

Date Gross Client Assets Margin Balance 

June 30, 2019 $20.45 million ($2.87 million) 

December 31, 2019 $51.05 million ($10.64 million) 

June 30, 2020 $94.96 million ($11.09 million) 

December 31, 2020 $310.26 million ($27.3 million) 

May 31, 2021 $466.29 million ($40.21 million) 

 

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111. Brite Australia’s use of the margin feature to fund the operational expenses of the 

Brite Group, including Brite USA, primarily drove this margin balance growth.   

112. Between October 30, 2019, and June 1, 2021, Brite Australia withdrew over $32 

million from the Original Omnibus Account to its business operations bank accounts, 

approximately 80% of the total outstanding margin balance of $40.21 million as of May 31, 

2021.   

2. Advances of “Exit Fees”  

113. In addition, Brite Australia purportedly funded cash advances of “exit fees” 

incurred by Brite USA clients with QROPS from their prior custodian (described above in 

Section I.B.) and by clients of other Brite Group companies by using the margin feature in the 

Original Omnibus Account prior to June 2021.   

114. Use of the margin feature to fund advances of “exit fees” makes all of the client 

assets in the Client Omnibus Accounts —including the assets of clients who did not receive such 

advances—collateral for the margin loan balance incurred.  

B. Brite USA Was on Notice of Brite Australia’s Margin Borrowing prior to 
June 2021 But Failed to Disclose Risks and Conflicts of Interest to Clients  

115. On May 7, 2019, in response to Brite USA’s requests for information about the 

Brite Platform, the Brite Group Parent provided a copy of Brite Australia’s clearing agreement 

with the Global Broker-Dealer to Brite USA’s CEO at the time (“Brite USA Executive-C”).  

116. The clearing agreement described margin feature privileges available on the 

Original Omnibus Account, including the Global Broker-Dealer’s right to liquidate assets in the 

account without prior notice should the account fail to meet its margin requirements.   

117. That same day, Brite USA Executive-C emailed the document to other Brite USA 

executives, including Brite USA Executive-B, who at that time was Brite USA’s General 

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Counsel and later served as CEO prior to the appointment of Brite USA Executive-A as CEO in 

or around June 2020 as described in paragraph 92 above.   

118. However, Brite USA failed to make further inquiries of the Brite Group Parent or 

Brite Australia regarding the margin feature and made inaccurate and misleading disclosures to 

its clients.   

119. Beginning in approximately August 2019, when Brite USA began recommending 

the Brite Platform to clients, Brite USA’s Investment Advisory Agreement (“Advisory 

Agreement”) with clients at the time included a section with respect to the Brite Platform titled 

“Conflicts of Interest”.  

120. That section stated that Brite USA “receives or will seek to receive an advance of 

its [advisory fee] from [the Brite Group Parent] equal to up to five years’ of annual [advisory 

fees] which it would cede to [the Brite Group Parent],” and the section falsely described the 

source of the advances as “a credit facility it [the Brite Group Parent] maintains with [the Global 

Broker-Dealer Affiliate], an affiliate of [the Global Broker-Dealer].”   

121. In fact, the source of funding Brite USA received from the Brite Group Parent 

was primarily from Brite Australia incurring a margin loan position on the Original Omnibus 

Account holding Brite USA’s own clients’ assets.   

122. By incorrectly identifying the source of funding, Brite USA failed to disclose the 

risks and conflicts created by the Brite Group Parent and Brite Australia borrowing against Brite 

USA’s clients’ assets to fund the operations of the Brite Group, including Brite USA.    

123. Similarly, while Brite USA’s Advisory Agreement and Form ADV Brochure 

disclosed that Brite Australia had agreed to advance “exit fees” to clients with QROPS who 

incurred such fees when switching to the Brite Platform (subject to repayment by the client), 

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both documents omitted the important information that Brite Australia would fund any such 

advances of “exit fees” by incurring a margin loan balance on the Original Omnibus Account 

that encumbered all client assets, regardless of whether the client received an advance.   

124. On or about July 19, 2020, Brite USA Executive-B emailed Brite Group 

Executive-2 attaching Brite USA’s most recent ADV Brochure, dated June 12, 2020, as well as a 

separate written set of questions.   

125. In his email and the attached set of questions, Brite USA Executive-B sought 

answers about conflicts of interest and comments on Brite USA’s existing or draft descriptions of 

certain conflicts involving the Brite Platform—including Brite USA’s draft description of the 

Brite Group Parent’s use of a credit facility with the Global Broker-Dealer Affiliate to fund exit 

fee advances made to Brite USA clients and Brite USA’s current Advisory Agreement disclosure 

regarding Brite USA’s potential receipt of an advance of up to five years’ of annual advisory fees 

from the Brite Group Parent.   

126. In response, on approximately July 21, 2020, Brite Group Executive-2 explained 

that Brite USA Executive-B appeared to misunderstand the nature of the Brite Group Parent’s 

credit facilities with the Global Broker-Dealer.  

127. Brite Group Executive-2 noted that there were two debt structures:  (1) a credit 

facility to promote the growth and expansion of the Brite Group that was strictly limited to 

spending on acquisitions of firms within the same market sector and (2) a separate “credit facility 

on the master account with [the Global Broker-Dealer], where clients cash and assets are 

custodied.”  Brite Group Executive-2 noted the credit facility on the client account was to fund 

both “exit fee” advances to clients and the advances of advisory fees, and that client repayments 

of “exit fee” advances and annual advisory fees “reduce the debt.”  Brite Group Executive-2 

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added further, “Please note that this is not a margin account” (emphasis in original).   

128. Despite describing the client account as “not a margin account,” Brite Group 

Executive-2 made clear the existence of a “credit facility on the master account … where clients 

cash and assets are custodied,” i.e., the Original Omnibus Account, which, by his description, 

was being used both to fund exit fee advances to clients and advances of up to five years’ of 

advisory fees to Brite USA.   

129. That same day Brite USA Executive-B forwarded the email to Brite USA 

Executive-A (then Brite USA’s CEO) and others.     

130. Brite Group Executive-2’s description of the credit facility on the Original 

Omnibus Account put Brite USA on notice that the Brite Group Parent, through Brite Australia, 

was borrowing against client assets in the Original Omnibus Account.   

131. Yet Brite USA made no further inquiries into the nature of that credit facility at 

that time, including as to the extent of its use and the collateral.   

132. Instead, at some point after receiving Brite Group Executive-2’s July 20, 2020 

email, Brite USA decided to simply delete the disclosure described in paragraph 120 above from 

the Advisory Agreements entered into with clients.   

133. In addition, prior to June 2021, Brite USA did not disclose to its advisory clients 

the existence of the margin privileges on the Original Omnibus Account or its use to incur 

significant margin loan balances against Brite USA client assets on the Brite Platform.   

134. Between August 2019 and May 2021, pursuant to Brite USA recommendations, 

Brite USA clients with at least $298 million in SIPP and QROPS assets moved their assets to the 

Brite Platform—all of which occurred without full and fair disclosure of the attendant risks and 

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conflicts of interest described above.    

C. Brite USA Is Still Failing to Disclose Certain Risks and Conflicts of Interest 
to Its Advisory Clients  

135. In early June 2021, Brite Australia began using a new Client Omnibus Account at 

the Global Broker-Dealer in the name of Brite Australia (the “New US Omnibus Account”) that 

Brite USA claims exclusively holds assets of Brite USA’s clients.  

136. Under this new arrangement, Brite USA’s clients’ assets and associated margin 

loan balances are purportedly held in the New US Omnibus Account, while assets for clients of 

all other Brite Group entities and associated margin loan balances remained in the Original 

Omnibus Account.   

137. The New US Omnibus Account’s margin loan balance is purportedly limited 

solely to the amount of advanced exit fees that is reduced by clients’ monthly repayments.   

138. Despite the apparent segregation of Brite USA’s clients’ assets and associated 

margin loan balance, this arrangement does not eliminate the risks borne by Brite USA’s 

advisory clients.  The Global Broker-Dealer is still entitled to liquidate assets in any of Brite 

Australia’s accounts with the Global Broker-Dealer without prior notice if the Original Omnibus 

Account or another Client Omnibus Account fails to meet its margin requirements at any time.  

As a result, Brite USA’s clients’ assets in the New US Omnibus Account continue to serve as 

collateral for margin loan balances incurred on the Original Omnibus Account.   

139. Shortly after the purported June 2021 “segregation” of the New US Omnibus 

Account and Original Omnibus Account, Brite USA sent its clients a new disclosure form 

entitled “Acknowledgement Of Omnibus Account Usage and Risks.”  

140. In this form, Brite USA disclosed, for the first time, that Brite USA client assets 

on the Brite Platform had previously been commingled in the Original Omnibus Account with 

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client assets of other Brite Group companies and that Brite Australia used margin loans secured 

by client assets to fund both exit fee advances and the operations of the Brite Group, including 

those of Brite USA.   

141. This disclosure described certain risks associated with the use of margin, such as 

the fact that assets in any Brite Australia account at the Global Broker-Dealer could be liquidated 

to satisfy a margin obligation of another Brite Australia account.  However, the disclosure did 

not fully reveal the extent to which margin debt on the Original Omnibus Account had already 

funded Brite USA’s operations or the extent of borrowing against the Original Omnibus 

Account, did not describe the extent to which Brite USA relied upon the Brite Group Parent and 

Brite Australia for ongoing financial support, and did not explain the related conflicts of interest.   

142. The disclosure form concluded by stating:  “Brite USA has inquired of [Brite 

Australia] in respect of these [Client Omnibus Account] risks and believe that the use of the 

[New US Omnibus Account] (including margin) is appropriate, and does not present to its clients 

a materially increased risk relative to individual accounts, based on [Brite Australia’s] 

representations,” which it listed as including Brite Australia’s segregation of assets and liabilities 

to each individual account and that “[Brite Australia] performs reconciliations between account 

holdings on the Brite Platform and omnibus accounts each business day.”  However, the 

disclosure failed to provide any information to clients relating to the financial condition and 

capacity of the Brite Group Parent and Brite Australia to repay the margin debt incurred on the 

Original Omnibus Account for operational funding.   

143. Moreover, Brite USA failed to disclose information on Brite Australia’s use of 

margin in the Original Omnibus Account, which grew rapidly from June 2021 to June 2022, as 

depicted in the chart below:   

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Date 

Original Omnibus (Non-Brite USA) New US Omnibus (Brite USA only) 

Gross Assets Margin Gross Assets Margin 

June 30, 2021 $181.8 million ($43.69 million) $318.15 million  ($10.42 million) 

Dec. 31, 2021 $250.04 million ($70.62 million) $391.83 million ($8.76 million) 

June 30, 2022 $260.27 million ($88.76 million) $341.64 million ($10.08 million) 

144. Because Brite USA’s client assets continued to serve as collateral for margin debt 

in all of Brite Australia’s accounts at the Global Broker-Dealer, the risks to Brite USA’s clients 

continued to grow along with Brite Australia’s overall margin debt incurred in either of the 

Client Omnibus Accounts.    

145. Yet Brite USA has continued to recommend the Brite Platform to clients 

throughout this time and continued to represent to its clients that Brite USA believes the 

arrangement is “appropriate” and does not present “a materially increased risk relative to 

individual accounts” for Brite USA clients.  

146. Overall margin debt in the Original Omnibus Account dropped substantially 

between June 30, 2022, and December 31, 2022, due to two large payments Brite Australia made 

using cash in the Original Omnibus Account to pay down the margin loan balance.   

147. Brite Australia purportedly further split the Original Omnibus Account beginning 

in or about March 2023 by using additional Client Omnibus Accounts to hold certain client 

assets previously held in the Original Omnibus Account.  

IV. The Australian Commission Obtained a Freeze Order  

148. On October 27, 2023, the Australian Commission announced that it had obtained 

interim orders from an Australian federal court freezing the funds and assets of Brite Australia.   

149. According to the Australian Commission’s announcement, its application for the 

orders was made because the Australian Commission is concerned that “the current financial 

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position of [Brite Australia] is unknown, as [Brite Australia] has failed to lodge with the 

[Australian Commission] its financial statements and auditors report for the financial year ended 

30 June 2022; and the value of [Brite Australia’s] funds under management has not been 

reported by any entity within the Brite Group in an audited balance sheet since December 2019.”   

150. The announcement further states that “[the Australian Commission] sought the 

orders to help protect the beneficiaries of the assets under management by [Brite Australia], 

including the beneficiaries of those who have their pensions or superannuation funds invested on 

the Brite Platform.”   

151. The Australian Commission subsequently announced that, on November 9, 2023, 

the Australian federal court appointed investigative accountants to Brite Australia “to investigate 

the financial position of [Brite Australia], including client funds under its management, as well 

as provide a report to the Court and to [the Australian Commission],” and that “[t]he asset 

preservation orders remain in place.”   

FIRST CLAIM FOR RELIEF 
Violations of Advisers Act Section 206(2)  

152. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 20, 31 through 47, 63 through 74, and 97 through 151.  

153. At all relevant times, Brite USA was an investment adviser under Advisers Act 

Section 202(11) [15 U.S.C. § 80b-2(11)]. 

154. Brite USA, by use of the mails or any means or instrumentality of interstate 

commerce, directly or indirectly has knowingly, recklessly, or negligently engaged in one or 

more transactions, practices, and courses of business which operated or would operate as a fraud 

or deceit upon any client or prospective client. 

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155. By reason of the foregoing, Brite USA, directly or indirectly, singly or in concert, 

has violated and, unless enjoined, will again violate Advisers Act Section 206(2) [15 U.S.C. § 

80b-6(2)]. 

SECOND CLAIM FOR RELIEF 
Violations of Advisers Act Section 206(4) and Rule 206(4)-2 Thereunder  

 
156. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 96.  

157. At all relevant times, Brite USA has been an investment adviser registered with 

the Commission under Section 203 of the Advisers Act [15 U.S.C. § 80b-3]. 

158. At all relevant times, Brite USA has had custody of its advisory clients’ assets under 

the definition set forth in Rule 206(4)-2(d)(2) [17 C.F.R. § 275.206(4)-2(d)(2)]. 

159. At all relevant times, Brite Australia has been a related person of Brite USA and 

maintained funds and securities of Brite USA clients in connection with Brite USA’s advisory 

services to clients.    

160. Since at least August 2019, Brite USA has failed to obtain, or receive from Brite 

Australia, any internal control reports that comply with the requirements of Rule 206(4)-2(a)(6)(ii) 

[17 C.F.R. § 275.206(4)-2(a)(6)(2)]. 

161. By reason of the foregoing, Brite USA, directly or indirectly, has violated and 

unless enjoined will again violate Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 

206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

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 31 

I. 

Permanently enjoining Brite USA and its agents, servants, employees and attorneys and 

all persons in active concert or participation with any of them from violating, directly or 

indirectly, Advisers Act Sections 206(2) and 206(4) [15 U.S.C. §§ 80b-6(2) & 80b-6(4)] and 

Rule 206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].  

II. 

Ordering Brite USA to pay civil monetary penalties under Advisers Act Section 209(e) 

[15 U.S.C. § 80b-9(e)]; and 

III. 

Granting any other and further relief this Court may deem just and proper. 

JURY DEMAND 
 
The Commission demands a trial by jury. 
 
 
 
 
 
Dated: New York, New York 

November 21, 2023 
 

  /s/ Antonia M. Apps                                                
ANTONIA M. APPS 
REGIONAL DIRECTOR  
Sheldon L. Pollock 
Wendy B. Tepperman 
Travis Hill 
Jonathan M. Grant   
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616 
212-336-9135 (Hill) 
[email protected] 
  

Case 1:23-cv-10212   Document 1   Filed 11/21/23   Page 31 of 31


	ANTONIA M. APPS
	Regional Director
	Sheldon L. Pollock
	Wendy B. Tepperman
	Travis Hill
	Jonathan M. Grant
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street, Suite 20-100
	New York, New York 10004-2616
	212-336-9135 (Hill)
	[email protected]
	Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against Defendant Brite Advisors USA, Inc. (“Brite USA” or “Defendant”), alleges as follows:
	SUMMARY
	1. Brite USA — a Commission-registered investment adviser with nearly $400 million in client assets under management maintained by Brite Advisors Pty Ltd. (“Brite Australia”) — has failed and continues to fail to comply with the Commission’s “Custody ...
	2. Brite USA and Brite Australia are under common control.  For purposes of the Custody Rule, Brite USA therefore has custody of Brite USA client funds and securities maintained by Brite Australia, and Brite USA thus must comply with the Custody Rule.
	3. From 2019 to present (the “Relevant Period”), Brite USA has failed to comply with the Custody Rule’s requirement that it obtain or receive from Brite Australia an annual internal control report — an important safeguard that verifies client assets —...
	4. In addition, Brite USA has received millions of dollars in operational funding arranged by Brite Australia’s parent company, Brite Advisory Group Limited (the “Brite Group Parent”), during the Relevant Period.  This funding, in the form of regular ...
	5. Brite USA’s reliance on the Brite Group for funding creates conflicts of interest that Brite USA, as an investment adviser, has a fiduciary duty to fully and fairly disclose to its advisory clients.  Brite USA has failed to do so.
	6. Moreover, Brite USA has failed to comply with its fiduciary duty to fully disclose that, during the Relevant Period, a primary source of the funding to cover its operating expenses has been margin loans or other debt secured by client assets, inclu...
	7. In failing to fully disclose these related risks and conflicts of interest, Brite USA breached its fiduciary duty to its advisory clients in violation of Advisers Act Section 206(2).
	8. In October 2023, Brite Australia’s Australian regulator announced that it had sought and obtained an order from an Australian federal court freezing Brite Australia’s assets in part because “the value of [Brite Australia’s] funds under management h...
	VIOLATIONS
	9. By virtue of the foregoing conduct and as alleged further herein, Defendant has violated Sections 206(2) and 206(4) of the Advisers Act [15 U.S.C. §§ 80b-6(2) and 80b-6(4)] and Rule 206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].
	10. Unless Defendant is restrained and enjoined, Defendant will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.
	NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
	11. The Commission brings this action pursuant to the authority conferred upon it by Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-9(e)].
	12. The Commission seeks a final judgment: (a) permanently enjoining Defendant from violating the federal securities laws and rules this Complaint alleges it has violated; (b) ordering Defendant to pay civil money penalties pursuant to Advisers Act Se...
	JURISDICTION AND VENUE
	13. This Court has jurisdiction over this action pursuant to Advisers Act Section 214 [15 U.S.C. § 80b-14].
	14. Defendant, directly and indirectly, has made use of the means or instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, practices, and courses of business alleged herein.
	15. Venue lies in this District under Advisers Act Section 214 [15 U.S.C. § 80b-14]. Defendant’s principal office and principal place of business is in the Southern District of New York, Defendant conducts business in this District and certain of the ...
	DEFENDANT
	16. Brite USA (f/k/a deVere USA, Inc., prior to January 2019) is a Florida corporation with its principal place of business in New York, New York.  Brite USA has been registered with the Commission as an investment adviser since 2013.  In its 2022 ann...
	OTHER RELEVANT INDIVIDUALS AND ENTITIES
	17. Brite Group Parent is a Hong Kong company and at all relevant times has been the parent company of Brite Australia.  The Brite Group Parent also controls or is under common control with the Brite Group, which operates worldwide as investment advis...
	18. Brite Australia is an Australian financial services firm with its registered principal office in Sydney, Australia, and is a direct, wholly-owned subsidiary of the Brite Group Parent.  Brite Australia is registered with and licensed by the Austral...
	BACKGROUND ON THE CUSTODY RULE
	I. Background
	A. Brite USA’s Investment Advisory Business
	B. The Brite Platform and the Exit Fees

	II. Brite USA, Brite Australia and the Brite Group Parent Are Under Common Control for Purposes of the Custody Rule
	A. Brite Group Executive-1’s Roles at Brite USA and the Brite Group Parent Establish Common Control
	B. The Brite Group CEO and The Brite Group Parent Also Control Brite USA
	1. The Brite Group Parent Arranged and Funded the Acquisition of Brite USA
	2. The Brite Group CEO and the Brite Group Parent Exercise Financial Control Over Brite USA
	3. The Brite Group CEO and the Brite Group Parent Oversaw Brite USA’s Regulatory Filings and Directed Brite USA to Offer the Brite Platform
	4. The Brite Group CEO and the Brite Group Parent Hired Brite USA’s CEO


	94. After joining Brite USA, Brite USA Executive-A regularly communicated with the Brite Group CEO, speaking with him an average of twice weekly by telephone.
	C. Since 2019, Brite USA Has Violated the Custody Rule

	95. Since 2019, Brite USA has had custody of its clients’ assets because Brite Australia, a “related person” under common control, has acted as a qualified custodian and has held Brite USA client assets in connection with Brite USA’s advisory services...
	96. However, since 2019, Brite USA has never sought or obtained an internal control report for Brite Australia prepared by an independent public accountant registered with the PCAOB.
	III. Brite USA Failed to Fully Disclose Risks and Conflicts of Interest Related to the Brite Platform
	A. Brite Australia Used the Margin Feature in the Client Omnibus Accounts to Borrow Millions of Dollars
	1. Operational Funding for the Brite Group


	107. Since at least 2019, Brite USA has received approximately $19 million from Brite Australia and other companies within the Brite Group to pay its operational expenses.
	108. To meet Brite USA’s operational funding needs (and to fund the operations of other Brite Group companies), Brite Australia incurred a significant margin loan balance on the Original Omnibus Account.
	109. Brite Australia typically did so by using the margin feature and initiating cash withdrawals from the Original Omnibus Account to Brite Australia’s operations bank accounts, which were reflected in the Original Omnibus Account as a negative cash ...
	110. Brite Australia’s total margin balance in the Original Omnibus Account grew substantially over time, as depicted below:
	2. Advances of “Exit Fees”
	B. Brite USA Was on Notice of Brite Australia’s Margin Borrowing prior to June 2021 But Failed to Disclose Risks and Conflicts of Interest to Clients
	C. Brite USA Is Still Failing to Disclose Certain Risks and Conflicts of Interest to Its Advisory Clients

	IV. The Australian Commission Obtained a Freeze Order
	FIRST CLAIM FOR RELIEF
	Violations of Advisers Act Section 206(2)
	152. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 20, 31 through 47, 63 through 74, and 97 through 151.
	153. At all relevant times, Brite USA was an investment adviser under Advisers Act Section 202(11) [15 U.S.C. § 80b-2(11)].
	154. Brite USA, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly has knowingly, recklessly, or negligently engaged in one or more transactions, practices, and courses of business which operated or woul...
	155. By reason of the foregoing, Brite USA, directly or indirectly, singly or in concert, has violated and, unless enjoined, will again violate Advisers Act Section 206(2) [15 U.S.C. § 80b-6(2)].
	Violations of Advisers Act Section 206(4) and Rule 206(4)-2 Thereunder
	156. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 96.
	157. At all relevant times, Brite USA has been an investment adviser registered with the Commission under Section 203 of the Advisers Act [15 U.S.C. § 80b-3].
	158. At all relevant times, Brite USA has had custody of its advisory clients’ assets under the definition set forth in Rule 206(4)-2(d)(2) [17 C.F.R. § 275.206(4)-2(d)(2)].
	159. At all relevant times, Brite Australia has been a related person of Brite USA and maintained funds and securities of Brite USA clients in connection with Brite USA’s advisory services to clients.
	160. Since at least August 2019, Brite USA has failed to obtain, or receive from Brite Australia, any internal control reports that comply with the requirements of Rule 206(4)-2(a)(6)(ii) [17 C.F.R. § 275.206(4)-2(a)(6)(2)].
	161. By reason of the foregoing, Brite USA, directly or indirectly, has violated and unless enjoined will again violate Advisers Act Section 206(4) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-2 thereunder [17 C.F.R. § 275.206(4)-2].
	PRAYER FOR RELIEF
	Dated: New York, New York
	Sheldon L. Pollock
	Wendy B. Tepperman
	Travis Hill
	Jonathan M. Grant
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street, Suite 20-100
	New York, New York 10004-2616
	212-336-9135 (Hill)
	[email protected]