In re TRAPHAGEN

1 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101063 / September 17, 2024 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6707 / September 17, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22140 
  
 
In the Matter of 
 
TRAPHAGEN 
INVESTMENT 
ADVISORS, LLC 
 
Respondent. 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE- 
AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTION 21C OF 
THE SECURITIES EXCHANGE 
ACT OF 1934 AND SECTION 203(e) 
OF THE INVESTMENT ADVISERS 
ACT OF 1940, MAKING FINDINGS, 
AND IMPOSING REMEDIAL 
SANCTIONS AND A CEASE-AND-
DESIST ORDER 
 
I. 
 
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”) and 
Section 203(e) of the Investment Advisers Act of 1940 (“Advisers Act”), against Traphagen 
Investment Advisors, LLC (“Respondent”). 
 
II. 
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 
Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of 
these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-
Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Section 
203(e) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial 

2 
 
Sanctions and a Cease-and-Desist Order (“Order”) as set forth below. 
 
III. 
 
On the basis of this Order and Respondent’s Offer, the Commission finds that: 
 
Summary 
 
From at least December 2019 through the present, Respondent, a registered investment 
adviser, has had investment discretion over at least $100 million of reportable securities and was 
therefore obligated to file quarterly Forms 13F beginning by at least February 2020. However, 
Respondent failed to file Forms 13F until May 2024.   
 
Respondent 
 
1. Respondent, an investment adviser registered with the Commission and an 
“institutional investment manager” as defined in Section 13(f) of the Exchange Act, is a New 
Jersey limited liability company with its principal place of business in Oradell, New Jersey.  
Respondent offers comprehensive financial services, including investment advisor services and 
retirement plan services. As of February 28, 2024, Respondent had total regulatory assets under 
management of $1.5 billion.  
 
Background 
 
2. Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder require that 
institutional investment managers file Forms 13F with the Commission on a quarterly basis if they 
exercise investment discretion over “Section 13(f) Securities” having an aggregate fair market 
value of at least $100 million. Section 13(f) Securities are equity securities of a class described in 
Rule 13f-1(c) under the Exchange Act. A list of these securities - called the Official List of Section 
13(f) Securities - is available on the Commission’s website.
1
 The Official List of Section 13(f) 
Securities primarily includes U.S. exchange-traded stocks (e.g., NYSE, AMEX, NASDAQ), shares 
of closed-end investment companies, and shares of exchange-traded funds (ETFs). Certain 
convertible debt securities, equity options, and warrants are on the Official List.  Pursuant to Rule 
13f-1(b), an investment manager is deemed to exercise discretion over all accounts for which any 
person or entity under the control of the investment manager exercises investment discretion. Form 
13F requires such institutional investment managers, among other things, to disclose to the 
Commission the fair market value of its Section 13(f) Securities under management. Forms 13F 
filed with the Commission are available to the public on the Commission’s website. 
 
3. One Congressional purpose in enacting Section 13(f)(1) of the Exchange Act was 
to create “a central depository of historical and current data about the investment activities of 
institutional investment managers” to assist investors and government regulators. S. Rep. No. 94-
75, 94th Cong., 2d Sess. 82-85 (1975). 
                                                      
1
 https://www.sec.gov/divisions/investment/13flists.htm. 

3 
 
 
Facts 
 
4. Beginning on the last trading day of December 2019, Respondent exercised 
investment discretion over Section 13(f) Securities with a fair market value of at least $100 
million.   
 
5. Because Respondent exercised investment discretion over at least $100 million 
worth of Section 13(f) Securities on the last trading day of at least one month in 2019, 
Respondent was obligated to disclose its 2019 year-end holdings of Section 13(f) Securities by 
filing a Form 13F with the Commission within 45 days of December 31, 2019. 
 
6. Subsequently, Respondent’s holdings of Section 13(f) Securities continued to be at 
least $100 million. Thus, from at least February 2020 until the present, Respondent has had an 
obligation to file Forms 13F on a quarterly basis. Respondent, however, failed to file any Forms 
13F prior to May 2024. 
 
7. On May 15, 2024, Respondent filed its first Form 13F, for the quarter ending 
March 31, 2024. That filing showed that, as of March 31, 2024, Respondent held positions in 175 
different Section 13(f) Securities, with a total market value of approximately $938 million. 
 
8. In June 2024, Respondent filed 20 Forms 13F, which covered the period from the 
quarter ending March 31, 2019, to the quarter ending December 31, 2023, inclusive. 
 
Violations 
 
9. As a result of the conduct described above, Respondent willfully
2
 violated Section 
13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F from the quarter 
ending December 31, 2019, to the quarter ending December 31, 2023. 
 
Respondent’s Remedial Efforts 
 
In determining to accept the Offer, the Commission considered certain remedial acts 
promptly undertaken by the Respondent. 
 
  
                                                      
2
 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act, “means no more than that the 
person charged with the duty knows what he is doing.’” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting 
Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no requirement that the actor “also be aware that he is 
violating one of the Rules or Acts.” Tager v. SEC, 344 F.2d 5,8 (2d Cir. 1965). The decision in The Robare Group, Ltd. 
v. SEC, which construed the term “willfully” for purposes of a differently structured statutory provision, does not alter 
that standard. 922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish that a person has 
“willfully omit[ted]” material information from a required disclosure in violation of Section 207 of the Advisers Act). 

4 
 
IV. 
In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 
 
Accordingly, pursuant to Section 21C of the Exchange Act and Section 203(e) of the 
Advisers Act, it is hereby ORDERED that: 
 
A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 13(f)(1) of the Exchange Act and Rule 13f-1 promulgated thereunder. 
 
B. Respondent is censured. 
 
C. Respondent shall, within 30 days of the entry of this Order, pay a civil money 
penalty in the amount of $225,000 to the Securities and Exchange Commission for transfer to the 
general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717. 
 
Payment must be made in one of the following ways: 
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request; 
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
(3) Respondent may pay by certified check, bank cashier’s check, or United States 
postal   money   order,   made   payable   to   the   Securities and   Exchange 
Commission and hand-delivered or mailed to: 
 
Enterprise Services Center  
Accounts Receivable Branch  
HQ Bldg., Room 181, AMZ-341 6 
500 South MacArthur Boulevard  
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Traphagen Investment Advisors, LLC as a Respondent in these proceedings, and the file number of 
these proceedings; a copy of the cover letter and check or money order must be sent to Nicholas 
Heinke, Associate Regional Director, Division of Enforcement, Securities and Exchange 
Commission, 1961 Stout Street, Suite 1700, Denver, CO 80294. 
 
  

5 
 
Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated 
as penalties paid to the government for all purposes, including all tax purposes. To preserve the 
deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall 
not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of 
compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in 
this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 
Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 
Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 
additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 
in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 
damages action brought against Respondent by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
By the Commission. 
 
 
 
  Vanessa A. Countryman  
Secretary 
 
 

1  

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 101063 / September 17, 2024 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6707 / September 17, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22140 

  

 

In the Matter of 

 

TRAPHAGEN 

INVESTMENT 

ADVISORS, LLC 

 

Respondent. 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE- 

AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTION 21C OF 

THE SECURITIES EXCHANGE 

ACT OF 1934 AND SECTION 203(e) 

OF THE INVESTMENT ADVISERS 

ACT OF 1940, MAKING FINDINGS, 

AND IMPOSING REMEDIAL 

SANCTIONS AND A CEASE-AND-

DESIST ORDER 

 

I. 

 

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”) and 

Section 203(e) of the Investment Advisers Act of 1940 (“Advisers Act”), against Traphagen 

Investment Advisors, LLC (“Respondent”). 

 

II. 

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 

Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of 

these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-

Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Section 

203(e) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial 



2  

Sanctions and a Cease-and-Desist Order (“Order”) as set forth below. 

 

III. 

 

On the basis of this Order and Respondent’s Offer, the Commission finds that: 

 

Summary 

 

From at least December 2019 through the present, Respondent, a registered investment 

adviser, has had investment discretion over at least $100 million of reportable securities and was 

therefore obligated to file quarterly Forms 13F beginning by at least February 2020. However, 

Respondent failed to file Forms 13F until May 2024.   

 

Respondent 

 

1. Respondent, an investment adviser registered with the Commission and an 

“institutional investment manager” as defined in Section 13(f) of the Exchange Act, is a New 

Jersey limited liability company with its principal place of business in Oradell, New Jersey.  

Respondent offers comprehensive financial services, including investment advisor services and 

retirement plan services. As of February 28, 2024, Respondent had total regulatory assets under 

management of $1.5 billion.  

 

Background 

 

2. Section 13(f)(1) of the Exchange Act and Rule 13f-1 thereunder require that 

institutional investment managers file Forms 13F with the Commission on a quarterly basis if they 

exercise investment discretion over “Section 13(f) Securities” having an aggregate fair market 

value of at least $100 million. Section 13(f) Securities are equity securities of a class described in 

Rule 13f-1(c) under the Exchange Act. A list of these securities - called the Official List of Section 

13(f) Securities - is available on the Commission’s website.1 The Official List of Section 13(f) 

Securities primarily includes U.S. exchange-traded stocks (e.g., NYSE, AMEX, NASDAQ), shares 

of closed-end investment companies, and shares of exchange-traded funds (ETFs). Certain 

convertible debt securities, equity options, and warrants are on the Official List.  Pursuant to Rule 

13f-1(b), an investment manager is deemed to exercise discretion over all accounts for which any 

person or entity under the control of the investment manager exercises investment discretion. Form 

13F requires such institutional investment managers, among other things, to disclose to the 

Commission the fair market value of its Section 13(f) Securities under management. Forms 13F 

filed with the Commission are available to the public on the Commission’s website. 

 

3. One Congressional purpose in enacting Section 13(f)(1) of the Exchange Act was 

to create “a central depository of historical and current data about the investment activities of 

institutional investment managers” to assist investors and government regulators. S. Rep. No. 94-

75, 94th Cong., 2d Sess. 82-85 (1975). 

                                                      
1 https://www.sec.gov/divisions/investment/13flists.htm. 

https://www.sec.gov/divisions/investment/13flists.htm


3  

 

Facts 

 

4. Beginning on the last trading day of December 2019, Respondent exercised 

investment discretion over Section 13(f) Securities with a fair market value of at least $100 

million.   

 

5. Because Respondent exercised investment discretion over at least $100 million 

worth of Section 13(f) Securities on the last trading day of at least one month in 2019, 

Respondent was obligated to disclose its 2019 year-end holdings of Section 13(f) Securities by 

filing a Form 13F with the Commission within 45 days of December 31, 2019. 

 

6. Subsequently, Respondent’s holdings of Section 13(f) Securities continued to be at 

least $100 million. Thus, from at least February 2020 until the present, Respondent has had an 

obligation to file Forms 13F on a quarterly basis. Respondent, however, failed to file any Forms 

13F prior to May 2024. 

 

7. On May 15, 2024, Respondent filed its first Form 13F, for the quarter ending 

March 31, 2024. That filing showed that, as of March 31, 2024, Respondent held positions in 175 

different Section 13(f) Securities, with a total market value of approximately $938 million. 

 

8. In June 2024, Respondent filed 20 Forms 13F, which covered the period from the 

quarter ending March 31, 2019, to the quarter ending December 31, 2023, inclusive. 

 

Violations 

 

9. As a result of the conduct described above, Respondent willfully2 violated Section 

13(f)(1) of the Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F from the quarter 

ending December 31, 2019, to the quarter ending December 31, 2023. 

 

Respondent’s Remedial Efforts 

 

In determining to accept the Offer, the Commission considered certain remedial acts 

promptly undertaken by the Respondent. 

 

  

                                                      
2 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act, “means no more than that the 

person charged with the duty knows what he is doing.’” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting 

Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no requirement that the actor “also be aware that he is 

violating one of the Rules or Acts.” Tager v. SEC, 344 F.2d 5,8 (2d Cir. 1965). The decision in The Robare Group, Ltd. 

v. SEC, which construed the term “willfully” for purposes of a differently structured statutory provision, does not alter 

that standard. 922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish that a person has 

“willfully omit[ted]” material information from a required disclosure in violation of Section 207 of the Advisers Act). 



4  

IV. 

In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent’s Offer. 

 

Accordingly, pursuant to Section 21C of the Exchange Act and Section 203(e) of the 

Advisers Act, it is hereby ORDERED that: 

 

A. Respondent cease and desist from committing or causing any violations and any 

future violations of Section 13(f)(1) of the Exchange Act and Rule 13f-1 promulgated thereunder. 

 

B. Respondent is censured. 

 

C. Respondent shall, within 30 days of the entry of this Order, pay a civil money 

penalty in the amount of $225,000 to the Securities and Exchange Commission for transfer to the 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717. 

 

Payment must be made in one of the following ways: 

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request; 

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

 

(3) Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

 

Enterprise Services Center  

Accounts Receivable Branch  

HQ Bldg., Room 181, AMZ-341 6 

500 South MacArthur Boulevard  

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Traphagen Investment Advisors, LLC as a Respondent in these proceedings, and the file number of 

these proceedings; a copy of the cover letter and check or money order must be sent to Nicholas 

Heinke, Associate Regional Director, Division of Enforcement, Securities and Exchange 

Commission, 1961 Stout Street, Suite 1700, Denver, CO 80294. 

 

  

http://www.sec.gov/about/offices/ofm.htm


5  

Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated 

as penalties paid to the government for all purposes, including all tax purposes. To preserve the 

deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall 

not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of 

compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in 

this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty 

Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 

Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty 

Offset to the Securities and Exchange Commission. Such a payment shall not be deemed an 

additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 

in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a private 

damages action brought against Respondent by or on behalf of one or more investors based on 

substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

By the Commission. 

 

 

 

  Vanessa A. Countryman  

Secretary 

 

 


	UNITED STATES OF AMERICA
	SECURITIES AND EXCHANGE COMMISSION
	INVESTMENT ADVISERS ACT OF 1940
	I.
	II.
	Summary
	Respondent
	Background
	Facts
	Violations
	Respondent’s Remedial Efforts

	IV.