SEC Charges Advisory Firm Navy Capital With Misrepresenting Its Anti-Money Laundering Procedures to Investors
summary
Navy Capital Green Management, LLC settled SEC charges for misrepresenting its anti-money laundering compliance, resulting in a $150,000 civil penalty and a censure.
paragraph
Navy Capital Green Management, LLC was charged with willfully violating the Investment Advisers Act of 1940 by misrepresenting its anti-money laundering (AML) procedures. Between 2018 and 2022, the firm claimed to perform specific AML due diligence that it failed to actually execute for various private fund investors. To resolve these charges, the firm agreed to a censure and a $150,000 civil penalty.
narrative
The SEC charged Connecticut-based investment adviser Navy Capital Green Management, LLC with misrepresenting its anti-money laundering (AML) compliance capabilities and failing to implement adequate written policies. From October 2018 to January 2022, the firm claimed to perform specific AML due diligence that it did not consistently execute, particularly regarding foreign-based entities with opaque ownership. This failure led to significant risk, including a foreign court freezing private fund assets due to an investor's connections to money laundering. The SEC found that Navy Capital willfully violated the Investment Advisers Act of 1940. To settle the matter, Navy Capital agreed to a censure and a $150,000 civil penalty without admitting or denying the findings. This enforcement action highlights the necessity for investment advisers to align their stated compliance procedures with actual practices.
Classified investment-adviser-fraud(confidence 95%). EDGAR detection: forms ADV/ADV-E/ADV-W/Form D· recall 33% / precision 13%. detection rule →
Statutes
15 U.S.C. § 80b-6
Parties
navy capital green management, llcsec’s investigationSecurities and Exchange Commissiontejal d. shahthe sec’s charges and pay a $150,000 civil penalty
Keywords
navy capitalnavycapitalinvestorssecamlorderanti-money launderingorder findsinvestment advisersfinds navyproceduresduediligencelaundering
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 1
- $150K $150,000 $100K–$1M
Entities 5
- company navy capital green management, llc
- agency sec’s investigation
- agency Securities and Exchange Commission
- person tejal d. shah
- agency the sec’s charges and pay a $150,000 civil penalty
Triples 12
- Securities and Exchange Commission charged Navy Capital Green Management, LLC with making misrepresentations related to its anti-money laundering (AML) procedures and for compliance failures
- Navy Capital Green Management, LLC agreed to settle the SEC’s charges and pay a $150,000 civil penalty
- Navy Capital Green Management, LLC stated in offering and other documents that the firm was voluntarily complying with AML due diligence laws despite those laws not applying to investment advisers
- Navy Capital Green Management, LLC conducted specific types of AML due diligence on prospective investors and conducting ongoing AML due diligence monitoring on existing investors
- Navy Capital Green Management, LLC did not conduct the AML due diligence as described, including with respect to an entity owned by an individual publicly reported to have suspected connections to money laundering activities
- a foreign court froze the assets of one of Navy Capital’s private funds because it held funds from that investor
- Navy Capital Green Management, LLC failed to adopt and implement written policies and procedures reasonably designed to ensure the accuracy of offering and other documents provided to prospective and existing investors
- Tejal D. Shah said “This case reinforces the fundamental duty of investment advisers to say what they do and do what they say,”
- Navy Capital Green Management, LLC willfully violated the Investment Advisers Act of 1940 and related rules
- Navy Capital Green Management, LLC agreed to cease and desist from violations of the charged provisions, be censured, and pay the civil penalty mentioned above
- SEC’s investigation was conducted by Danielle Sallah, Peter Altenbach, and Steven G. Rawlings and was supervised by Ms. Shah, all from the Enforcement Division’s New York Regional Office
- examination team that led to the investigation was conducted by Arthur Schmidt, James Maclean, Rachel Lavery, Gerard Sansobrino, and David Eidelman
PDF (from attached: pdf)
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Extracted body text (2,576c)
The Securities and Exchange Commission today charged Connecticut-based investment adviser Navy Capital Green Management, LLC with making misrepresentations related to its anti-money laundering (AML) procedures and for compliance failures. Navy Capital agreed to settle the SEC’s charges and pay a $150,000 civil penalty. The SEC’s order finds that, from at least October 2018 until January 2022, Navy Capital stated in offering and other documents provided to prospective and existing private fund investors that the firm was voluntarily complying with AML due diligence laws despite those laws not applying to investment advisers, including by conducting specific types of AML due diligence on prospective investors and conducting ongoing AML due diligence monitoring on existing investors. According to the order, Navy Capital’s private fund investors included multiple foreign-based entities with opaque beneficial ownership and sources of wealth. The order finds that Navy Capital did not, in fact, always conduct the AML due diligence as described, including with respect to an entity owned by an individual publicly reported to have suspected connections to money laundering activities. As noted in the order, a foreign court eventually froze the assets of one of Navy Capital’s private funds because it held funds from that investor. The SEC’s order further finds that Navy Capital failed to adopt and implement written policies and procedures reasonably designed to ensure the accuracy of offering and other documents provided to prospective and existing investors. “This case reinforces the fundamental duty of investment advisers to say what they do and do what they say,” said Tejal D. Shah, Associate Regional Director of the SEC’s New York Regional Office. “Here, Navy Capital failed to follow the AML due diligence procedures that it said it would, thus misleading investors about the level of risk they were undertaking.” The Commission’s order finds that Navy Capital willfully violated the Investment Advisers Act of 1940 and related rules. Without admitting or denying the findings, Navy agreed to cease and desist from violations of the charged provisions, be censured, and pay the civil penalty mentioned above. The SEC’s investigation was conducted by Danielle Sallah, Peter Altenbach, and Steven G. Rawlings and was supervised by Ms. Shah, all from the Enforcement Division’s New York Regional Office. The examination team that led to the investigation was conducted by Arthur Schmidt, James Maclean, Rachel Lavery, Gerard Sansobrino, and David Eidelman.
OCR text (2,576c · html-text · 99% conf)
The Securities and Exchange Commission today charged Connecticut-based investment adviser Navy Capital Green Management, LLC with making misrepresentations related to its anti-money laundering (AML) procedures and for compliance failures. Navy Capital agreed to settle the SEC’s charges and pay a $150,000 civil penalty. The SEC’s order finds that, from at least October 2018 until January 2022, Navy Capital stated in offering and other documents provided to prospective and existing private fund investors that the firm was voluntarily complying with AML due diligence laws despite those laws not applying to investment advisers, including by conducting specific types of AML due diligence on prospective investors and conducting ongoing AML due diligence monitoring on existing investors. According to the order, Navy Capital’s private fund investors included multiple foreign-based entities with opaque beneficial ownership and sources of wealth. The order finds that Navy Capital did not, in fact, always conduct the AML due diligence as described, including with respect to an entity owned by an individual publicly reported to have suspected connections to money laundering activities. As noted in the order, a foreign court eventually froze the assets of one of Navy Capital’s private funds because it held funds from that investor. The SEC’s order further finds that Navy Capital failed to adopt and implement written policies and procedures reasonably designed to ensure the accuracy of offering and other documents provided to prospective and existing investors. “This case reinforces the fundamental duty of investment advisers to say what they do and do what they say,” said Tejal D. Shah, Associate Regional Director of the SEC’s New York Regional Office. “Here, Navy Capital failed to follow the AML due diligence procedures that it said it would, thus misleading investors about the level of risk they were undertaking.” The Commission’s order finds that Navy Capital willfully violated the Investment Advisers Act of 1940 and related rules. Without admitting or denying the findings, Navy agreed to cease and desist from violations of the charged provisions, be censured, and pay the civil penalty mentioned above. The SEC’s investigation was conducted by Danielle Sallah, Peter Altenbach, and Steven G. Rawlings and was supervised by Ms. Shah, all from the Enforcement Division’s New York Regional Office. The examination team that led to the investigation was conducted by Arthur Schmidt, James Maclean, Rachel Lavery, Gerard Sansobrino, and David Eidelman.