In re Lend Academy Investments

 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No.  6118 / September 9, 2022 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-21055 
 
 
In the Matter of 
 
Lend Academy Investments, 
LLC  
 
Respondent. 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 203(e) AND 
203(k) 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 Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 
(“Advisers Act”) against Lend Academy Investments, LLC (“Lend Academy” or “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 Sections 203(e) and 203(k) of the 
Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 
Cease-and-Desist Order (“Order”), as set forth below. 
 
 

 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. Lend Academy, a registered investment adviser, is an investment adviser to private 
funds.  This matter concerns Lend Academy’s violations of the federal securities laws in connection 
with the financial statement audits of private funds that Lend Academy advised.  Lend Academy 
failed to conduct and timely distribute annual audited financial statements prepared in accordance 
with Generally Accepted Accounting Principles (“GAAP”) to investors in certain private funds that 
it advised.  In addition, Lend Academy did not properly describe the status of its fund’s financial 
statement audits when filing its Forms ADV and did not update certain responses in its Form ADV 
annual updating amendment for multiple years as required by the Form ADV instructions.  These 
failures resulted in violations of Section 206(4) of the Advisers Act and Rule 206(4)-2 thereunder, 
commonly referred to as the “custody rule,” and Section 204(a) and Rule 204-1(a) thereunder, 
which required Lend Academy to update certain information about Lend Academy’s private fund 
audits in its Forms ADV.       
 
Respondent 
 
2. Lend Academy Investments, LLC (“Lend Academy”) is a limited liability company 
with its principal place of business in New York, New York.  Lend Academy has been registered 
with the Commission as an investment adviser since June 25, 2015.  On its Form ADV dated April 
12, 2022, Lend Academy reported that it had approximately $28,370,215 in regulatory assets under 
management, including $2,643,736 managed in pooled investment vehicles.    
 
Other Relevant Entities 
 
3. The Lend Academy P2P, L.P. fund (“P2P Fund”) is a private fund formed as a 
limited partnership.  At all relevant times, Lend Academy was the general partner of the P2P Fund.  
Lend Academy has been the investment adviser to the P2P Fund since January 2014. 
 
4. The Lend Academy LendingRobot Series, L.L.C. fund (“LendingRobot Fund”) is a 
private fund formed as a limited liability company.  At all relevant times, Lend Academy was the 
manager of the LendingRobot Fund.  Lend Academy has been the investment adviser to the 
Lendingrobot Fund since approximately November 2017.  The LendingRobot Fund together with 
the P2P Fund are referred to collectively as the “Funds.”  
 
 
                                                 
1
 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 
this or any other proceeding.  
 

 3 
Lend Academy Failed to Distribute Required Audited Financial Statements 
 
5. The custody rule requires that registered investment advisers who have custody of 
client funds or securities implement an enumerated set of requirements to prevent the loss, misuse, 
or misappropriation of those assets.   
 
6. An investment adviser has custody of client assets if it holds, directly or indirectly, 
client funds or securities, or if it has the ability to obtain possession of those assets.  See Advisers 
Act Rule 206(4)-2(d)(2).  A related person of Lend Academy has served as the managing member 
or general partner of the Funds at all relevant times, and has had the authority to make decisions 
for, and act on behalf of, the Funds.  Lend Academy is therefore deemed to have custody of each 
Fund’s assets as defined in Advisers Act Rule 206(4)-2.  
 
7. An investment adviser with custody of client assets must, among other things:  
(i) ensure that a qualified custodian maintains the client assets; (ii) notify the client in writing of 
accounts opened by the adviser at a qualified custodian on the client’s behalf; (iii) have a 
reasonable basis for believing that the qualified custodian sends account statements at least 
quarterly to clients, except if the client is a limited partnership or limited liability company for 
which the adviser or a related person is a general partner or managing member, the account 
statements must be sent to each limited partner or member; and (iv) ensure that client funds and 
securities are verified by actual examination each year by an independent public accountant at a 
time chosen by the accountant without prior notice or announcement to the adviser.  See Advisers 
Act Rule 206(4)-2(a)(1)-(5).   
  
8. The custody rule provides an alternative to complying with the requirements of 
Advisers Act Rule 206(4)-2(a)(2), (3) and (4) for investment advisers to limited partnerships or 
other types of pooled investment vehicles.  The custody rule provides that an investment adviser 
“shall be deemed to have complied with” the independent verification requirement and is not 
required to satisfy the notification and accounts statements delivery requirements with respect to a 
fund if the fund is subject to audit at least annually and “distributes [the fund’s] audited financial 
statements prepared in accordance with generally accepted accounting principles to all limited 
partners . . . within 120 days of the end of [the fund’s] fiscal year” (“Audited Financials 
Alternative”).  See Advisers Act Rule 206(4)-2(b)(4).  The accountant performing the audit must 
be an independent public accountant that is registered with, and subject to regular inspection by, 
the Public Company Accounting Oversight Board (“PCAOB”).  See Advisers Act Rule 206(4)- 
2(b)(4)(ii).  An investment adviser to a limited partnership that fails to meet the requirements of the 
Audited Financials Alternative to timely distribute audited financial statements prepared in 
accordance with GAAP would need to satisfy all of the requirements of Rule 206(4)-2(a)(2)-(4) in 
order to avoid violating the custody rule.  
 
9. In 2017 and 2018, with respect to the P2P Fund, Lend Academy purported to rely 
on the Audited Financials Alternative in order to comply with the custody rule, but failed to timely 
deliver the audited financials to the fund’s investors.  Accordingly, Lend Academy did not satisfy 
the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for the P2P Fund.  It 

 4 
was therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which Lend 
Academy also failed to do.   
 
10. In 2019, 2020, and 2021, with respect to the P2P Fund, Lend Academy purported to 
rely on the Audited Financials Alternative in order to comply with the custody rule, but Lend 
Academy failed to have the required audits performed.  Accordingly, Lend Academy did not 
satisfy the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for the P2P 
Fund.  It was therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), 
which Lend Academy also failed to do.   
 
11. In 2018, 2019, 2020, and 2021, with respect to the LendingRobot Fund, Lend 
Academy purported to rely on the Audited Financials Alternative in order to comply with the 
custody rule, but Lend Academy failed to have the required audits performed.  Accordingly, Lend 
Academy did not satisfy the requirements of the Audited Financials Alternative in Rule 206(4)-
2(b)(4) for the LendingRobot Fund.  It was therefore obligated to comply with Advisers Act Rule 
206(4)-2(a)(2), (3) and (4), which Lend Academy also failed to do.   
 
Lend Academy Failed to Amend Information  
In Its Forms ADV Concerning the Private Fund Audits 
 
12. Item 7.B of Form ADV, Part 1A requires an investment adviser to state whether it 
is an adviser to any private fund.  In that case, the adviser must also complete Section 7.B.(1) of 
Form ADV, Part 1A, Schedule D.     
 
13. Section 7.B.23.(a) requires an investment adviser to disclose the following 
information for each private fund managed by the adviser:  (i) whether the private fund’s financial 
statements are subject to an annual audit (Section 7.B.23.(a)(1)); (ii) whether those financial 
statements, if annually audited, are prepared in accordance with GAAP (Section 7.B.23.(a)(2)); 
(iii) an identification of the auditing firm and whether the firm is an independent public accountant 
registered with the PCAOB that is subject to the PCAOB’s regular inspection (Section 7.B.23.(a), 
(b), (d), (e), and (f)); and (iv) whether the private fund’s audited financial statements for the most 
recently completed fiscal year have been distributed to fund investors (Section 7.B.23.(g)).           
 
14. Last, Section 7.B.23.(h) requires an investment adviser to state whether all of the 
audit reports prepared by the auditing firm for each of its advised funds, since the adviser’s last 
annual updating amendment, contained unqualified audit opinions.  In Section 7.B.23.(h), the 
private fund investment adviser must state “Yes,” “No,” or “Report Not Yet Received.”      
 
15. Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder require a 
registered investment adviser to amend its Form ADV at least annually, and more frequently as 
required by the instructions to Form ADV.  According to those instructions, an adviser must amend 
its Form ADV each year by filing an annual updating amendment within 90 days after the end of 
its fiscal year.  When an adviser submits its annual updating amendment, it must update its Form 
ADV, including its responses to all items in Part 1A and Schedule D.   
 

 5 
16. In its Form ADV filing dated January 16, 2019, Part 1A, Schedule D, Section 7.B, 
with respect to the P2P Fund, Lend Academy answered “Yes” to the question in paragraph 
23(a)(1) “Are the private fund’s financial statements subject to an annual audit” and “Yes” to the 
question in paragraph 23(h) “Do all of the reports prepared by the auditing firm for the private fund 
since your last updating amendment contain unqualified opinions?”  The following years, when it 
filed its annual updating amendments on March 6, 2020, March 23, 2021, and March 26, 2022, 
Lend Academy did not update and amend these responses even though the private fund’s financial 
statements were no longer subject to an annual audit.  Accordingly, in 2020, 2021, and 2022, Lend 
Academy failed to update and amend the Forms ADV as required by the instructions.   
 
Violations 
 
17. As a result of the conduct described above, Lend Academy willfully
2
 violated 
Sections 204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 thereunder. 
 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent Lend Academy’s Offer. 
 
 Accordingly, pursuant to Sections 203(e) and 203(k) 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 Sections 204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 
thereunder. 
 
B. Respondent is censured. 
 
C. Respondent shall, within 10 days of the entry of this Order, pay a civil money 
penalty in the amount of $75,000 to the Commission for transfer to the general fund of the United 
States Treasury, subject to the Securities Exchange Act of 1934 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:   
                                                 
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). 

 6 
 
(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 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying Lend 
Academy 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 Kimberly L. Frederick, Assistant 
Regional Director, Denver Regional Office, Securities and Exchange Commission, 1961 Stout 
Street, Suite 1700, Denver, CO 80294.   
 
 D. 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 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No.  6118 / September 9, 2022 

 

ADMINISTRATIVE PROCEEDING 

File No.  3-21055 

 

 

In the Matter of 

 

Lend Academy Investments, 

LLC  

 

Respondent. 

 

 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 203(e) AND 

203(k) 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 Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 

(“Advisers Act”) against Lend Academy Investments, LLC (“Lend Academy” or “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 Sections 203(e) and 203(k) of the 

Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 

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

 

 



 2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 
 

1. Lend Academy, a registered investment adviser, is an investment adviser to private 

funds.  This matter concerns Lend Academy’s violations of the federal securities laws in connection 

with the financial statement audits of private funds that Lend Academy advised.  Lend Academy 

failed to conduct and timely distribute annual audited financial statements prepared in accordance 

with Generally Accepted Accounting Principles (“GAAP”) to investors in certain private funds that 

it advised.  In addition, Lend Academy did not properly describe the status of its fund’s financial 

statement audits when filing its Forms ADV and did not update certain responses in its Form ADV 

annual updating amendment for multiple years as required by the Form ADV instructions.  These 

failures resulted in violations of Section 206(4) of the Advisers Act and Rule 206(4)-2 thereunder, 

commonly referred to as the “custody rule,” and Section 204(a) and Rule 204-1(a) thereunder, 

which required Lend Academy to update certain information about Lend Academy’s private fund 

audits in its Forms ADV.       

 

Respondent 

 

2. Lend Academy Investments, LLC (“Lend Academy”) is a limited liability company 

with its principal place of business in New York, New York.  Lend Academy has been registered 

with the Commission as an investment adviser since June 25, 2015.  On its Form ADV dated April 

12, 2022, Lend Academy reported that it had approximately $28,370,215 in regulatory assets under 

management, including $2,643,736 managed in pooled investment vehicles.    

 

Other Relevant Entities 

 

3. The Lend Academy P2P, L.P. fund (“P2P Fund”) is a private fund formed as a 

limited partnership.  At all relevant times, Lend Academy was the general partner of the P2P Fund.  

Lend Academy has been the investment adviser to the P2P Fund since January 2014. 

 

4. The Lend Academy LendingRobot Series, L.L.C. fund (“LendingRobot Fund”) is a 

private fund formed as a limited liability company.  At all relevant times, Lend Academy was the 

manager of the LendingRobot Fund.  Lend Academy has been the investment adviser to the 

Lendingrobot Fund since approximately November 2017.  The LendingRobot Fund together with 

the P2P Fund are referred to collectively as the “Funds.”  

 

 

                                                 
1 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 

this or any other proceeding.  

 



 3 

Lend Academy Failed to Distribute Required Audited Financial Statements 

 

5. The custody rule requires that registered investment advisers who have custody of 

client funds or securities implement an enumerated set of requirements to prevent the loss, misuse, 

or misappropriation of those assets.   

 

6. An investment adviser has custody of client assets if it holds, directly or indirectly, 

client funds or securities, or if it has the ability to obtain possession of those assets.  See Advisers 

Act Rule 206(4)-2(d)(2).  A related person of Lend Academy has served as the managing member 

or general partner of the Funds at all relevant times, and has had the authority to make decisions 

for, and act on behalf of, the Funds.  Lend Academy is therefore deemed to have custody of each 

Fund’s assets as defined in Advisers Act Rule 206(4)-2.  

 

7. An investment adviser with custody of client assets must, among other things:  

(i) ensure that a qualified custodian maintains the client assets; (ii) notify the client in writing of 

accounts opened by the adviser at a qualified custodian on the client’s behalf; (iii) have a 

reasonable basis for believing that the qualified custodian sends account statements at least 

quarterly to clients, except if the client is a limited partnership or limited liability company for 

which the adviser or a related person is a general partner or managing member, the account 

statements must be sent to each limited partner or member; and (iv) ensure that client funds and 

securities are verified by actual examination each year by an independent public accountant at a 

time chosen by the accountant without prior notice or announcement to the adviser.  See Advisers 

Act Rule 206(4)-2(a)(1)-(5).   

  

8. The custody rule provides an alternative to complying with the requirements of 

Advisers Act Rule 206(4)-2(a)(2), (3) and (4) for investment advisers to limited partnerships or 

other types of pooled investment vehicles.  The custody rule provides that an investment adviser 

“shall be deemed to have complied with” the independent verification requirement and is not 

required to satisfy the notification and accounts statements delivery requirements with respect to a 

fund if the fund is subject to audit at least annually and “distributes [the fund’s] audited financial 

statements prepared in accordance with generally accepted accounting principles to all limited 

partners . . . within 120 days of the end of [the fund’s] fiscal year” (“Audited Financials 

Alternative”).  See Advisers Act Rule 206(4)-2(b)(4).  The accountant performing the audit must 

be an independent public accountant that is registered with, and subject to regular inspection by, 

the Public Company Accounting Oversight Board (“PCAOB”).  See Advisers Act Rule 206(4)- 

2(b)(4)(ii).  An investment adviser to a limited partnership that fails to meet the requirements of the 

Audited Financials Alternative to timely distribute audited financial statements prepared in 

accordance with GAAP would need to satisfy all of the requirements of Rule 206(4)-2(a)(2)-(4) in 

order to avoid violating the custody rule.  

 

9. In 2017 and 2018, with respect to the P2P Fund, Lend Academy purported to rely 

on the Audited Financials Alternative in order to comply with the custody rule, but failed to timely 

deliver the audited financials to the fund’s investors.  Accordingly, Lend Academy did not satisfy 

the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for the P2P Fund.  It 



 4 

was therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), which Lend 

Academy also failed to do.   

 

10. In 2019, 2020, and 2021, with respect to the P2P Fund, Lend Academy purported to 

rely on the Audited Financials Alternative in order to comply with the custody rule, but Lend 

Academy failed to have the required audits performed.  Accordingly, Lend Academy did not 

satisfy the requirements of the Audited Financials Alternative in Rule 206(4)-2(b)(4) for the P2P 

Fund.  It was therefore obligated to comply with Advisers Act Rule 206(4)-2(a)(2), (3) and (4), 

which Lend Academy also failed to do.   

 

11. In 2018, 2019, 2020, and 2021, with respect to the LendingRobot Fund, Lend 

Academy purported to rely on the Audited Financials Alternative in order to comply with the 

custody rule, but Lend Academy failed to have the required audits performed.  Accordingly, Lend 

Academy did not satisfy the requirements of the Audited Financials Alternative in Rule 206(4)-

2(b)(4) for the LendingRobot Fund.  It was therefore obligated to comply with Advisers Act Rule 

206(4)-2(a)(2), (3) and (4), which Lend Academy also failed to do.   

 

Lend Academy Failed to Amend Information  

In Its Forms ADV Concerning the Private Fund Audits 

 

12. Item 7.B of Form ADV, Part 1A requires an investment adviser to state whether it 

is an adviser to any private fund.  In that case, the adviser must also complete Section 7.B.(1) of 

Form ADV, Part 1A, Schedule D.     

 

13. Section 7.B.23.(a) requires an investment adviser to disclose the following 

information for each private fund managed by the adviser:  (i) whether the private fund’s financial 

statements are subject to an annual audit (Section 7.B.23.(a)(1)); (ii) whether those financial 

statements, if annually audited, are prepared in accordance with GAAP (Section 7.B.23.(a)(2)); 

(iii) an identification of the auditing firm and whether the firm is an independent public accountant 

registered with the PCAOB that is subject to the PCAOB’s regular inspection (Section 7.B.23.(a), 

(b), (d), (e), and (f)); and (iv) whether the private fund’s audited financial statements for the most 

recently completed fiscal year have been distributed to fund investors (Section 7.B.23.(g)).           

 

14. Last, Section 7.B.23.(h) requires an investment adviser to state whether all of the 

audit reports prepared by the auditing firm for each of its advised funds, since the adviser’s last 

annual updating amendment, contained unqualified audit opinions.  In Section 7.B.23.(h), the 

private fund investment adviser must state “Yes,” “No,” or “Report Not Yet Received.”      

 

15. Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder require a 

registered investment adviser to amend its Form ADV at least annually, and more frequently as 

required by the instructions to Form ADV.  According to those instructions, an adviser must amend 

its Form ADV each year by filing an annual updating amendment within 90 days after the end of 

its fiscal year.  When an adviser submits its annual updating amendment, it must update its Form 

ADV, including its responses to all items in Part 1A and Schedule D.   

 



 5 

16. In its Form ADV filing dated January 16, 2019, Part 1A, Schedule D, Section 7.B, 

with respect to the P2P Fund, Lend Academy answered “Yes” to the question in paragraph 

23(a)(1) “Are the private fund’s financial statements subject to an annual audit” and “Yes” to the 

question in paragraph 23(h) “Do all of the reports prepared by the auditing firm for the private fund 

since your last updating amendment contain unqualified opinions?”  The following years, when it 

filed its annual updating amendments on March 6, 2020, March 23, 2021, and March 26, 2022, 

Lend Academy did not update and amend these responses even though the private fund’s financial 

statements were no longer subject to an annual audit.  Accordingly, in 2020, 2021, and 2022, Lend 

Academy failed to update and amend the Forms ADV as required by the instructions.   

 

Violations 

 

17. As a result of the conduct described above, Lend Academy willfully2 violated 

Sections 204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 thereunder. 

 

IV. 

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

impose the sanctions agreed to in Respondent Lend Academy’s Offer. 

 

 Accordingly, pursuant to Sections 203(e) and 203(k) 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 Sections 204(a) and 206(4) of the Advisers Act and Rules 204-1(a) and 206(4)-2 

thereunder. 

 

B. Respondent is censured. 

 

C. Respondent shall, within 10 days of the entry of this Order, pay a civil money 

penalty in the amount of $75,000 to the Commission for transfer to the general fund of the United 

States Treasury, subject to the Securities Exchange Act of 1934 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:   

                                                 
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). 



 6 

 

(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 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

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

Academy 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 Kimberly L. Frederick, Assistant 

Regional Director, Denver Regional Office, Securities and Exchange Commission, 1961 Stout 

Street, Suite 1700, Denver, CO 80294.   

 

 D. 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 

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