SEC Charges Investment Adviser and Two Officers for Misuse of Fund and Portfolio Company Assets

The Securities and Exchange Commission today filed settled charges against registered investment adviser Momentum Advisors LLC, its former managing partner Allan J. Boomer, and its former chief operating officer and partner Tiffany L. Hawkins, for breaches by Boomer and Hawkins of their fiduciary duties when they misused fund and portfolio company assets. According to the SEC’s orders, from at least August 2021 through February 2024, Hawkins misappropriated approximately $223,000 from portfolio companies of a private fund she managed with Boomer and that was advised by Momentum Advisors. Specifically, Hawkins misused portfolio company debit cards in more than 100 transactions to pay for vacations, clothing, and other personal expenses, and caused herself to be paid compensation in excess of her authorized salary. As set forth in the orders, Hawkins concealed her misconduct from Momentum Advisors, from the portfolio companies’ bookkeeper, and from SEC staff, and Boomer failed to reasonably supervise Hawkins despite red flags of her misappropriation. The order against Boomer also finds that he caused the fund to pay a business debt that should have been paid by an entity he and Hawkins controlled, resulting in an unearned benefit to the entity of $346,904, and that Momentum Advisors failed to adopt and implement adequate policies and procedures and to have the fund audited as required. “As the orders find, Hawkins and Boomer breached their fiduciary duties and misused fund and portfolio company assets for their own benefit, all to the detriment of their clients,” said Thomas P. Smith, Jr., Associate Regional Director in the New York Regional Office. The orders find that Hawkins and Boomer violated the antifraud provisions of the Investment Advisers Act of 1940, and that Momentum Advisors violated the compliance and custody rule provisions of the Advisers Act. Without admitting or denying the SEC’s findings, Hawkins, Boomer, and Momentum Advisors consented to the entry of cease-and-desist orders. Additionally, Hawkins agreed to pay a $200,000 civil penalty and to be subject to an associational bar; Boomer agreed to pay an $80,000 civil penalty and to be subject to a 12-month supervisory suspension; and Momentum Advisors agreed to a censure and to pay a $235,000 civil penalty. The SEC’s investigation was conducted by Alexander M. Levine, James Flynn, and Steven G. Rawlings, under the supervision of Mr. Smith, all of the New York Regional Office. The examination that led to the investigation was conducted by Emanuel S. Asmar, Majid S. Mahmood, and Arjuman Sultana of the Division of Examinations in the New York Regional Office.

The Securities and Exchange Commission today filed settled charges against registered investment adviser Momentum Advisors LLC, its former managing partner Allan J. Boomer, and its former chief operating officer and partner Tiffany L. Hawkins, for breaches by Boomer and Hawkins of their fiduciary duties when they misused fund and portfolio company assets. According to the SEC’s orders, from at least August 2021 through February 2024, Hawkins misappropriated approximately $223,000 from portfolio companies of a private fund she managed with Boomer and that was advised by Momentum Advisors. Specifically, Hawkins misused portfolio company debit cards in more than 100 transactions to pay for vacations, clothing, and other personal expenses, and caused herself to be paid compensation in excess of her authorized salary. As set forth in the orders, Hawkins concealed her misconduct from Momentum Advisors, from the portfolio companies’ bookkeeper, and from SEC staff, and Boomer failed to reasonably supervise Hawkins despite red flags of her misappropriation. The order against Boomer also finds that he caused the fund to pay a business debt that should have been paid by an entity he and Hawkins controlled, resulting in an unearned benefit to the entity of $346,904, and that Momentum Advisors failed to adopt and implement adequate policies and procedures and to have the fund audited as required. “As the orders find, Hawkins and Boomer breached their fiduciary duties and misused fund and portfolio company assets for their own benefit, all to the detriment of their clients,” said Thomas P. Smith, Jr., Associate Regional Director in the New York Regional Office. The orders find that Hawkins and Boomer violated the antifraud provisions of the Investment Advisers Act of 1940, and that Momentum Advisors violated the compliance and custody rule provisions of the Advisers Act. Without admitting or denying the SEC’s findings, Hawkins, Boomer, and Momentum Advisors consented to the entry of cease-and-desist orders. Additionally, Hawkins agreed to pay a $200,000 civil penalty and to be subject to an associational bar; Boomer agreed to pay an $80,000 civil penalty and to be subject to a 12-month supervisory suspension; and Momentum Advisors agreed to a censure and to pay a $235,000 civil penalty. The SEC’s investigation was conducted by Alexander M. Levine, James Flynn, and Steven G. Rawlings, under the supervision of Mr. Smith, all of the New York Regional Office. The examination that led to the investigation was conducted by Emanuel S. Asmar, Majid S. Mahmood, and Arjuman Sultana of the Division of Examinations in the New York Regional Office.