SEC Charges Investment Adviser With Defrauding Professional Athlete and His Wife
Jeremy Drake, a former investment adviser, defrauded a professional athlete and his wife by falsely claiming they paid a 0.15–0.20% VIP fee when they were actually charged 1%, leading to $1.2M in overpayments and $900K in personal gains, concealing the fraud for over three years with forged documents and a fake persona, and is now charged by the SEC with anti-fraud violations and facing injunction, disgorgement, and penalties.
The SEC charged Jeremy Drake with violating and aiding and abetting the anti-fraud provisions of the Investment Advisers Act of 1940 after he deceived a high-profile athlete and his wife into believing they paid a 0.15–0.20% annual advisory fee, when in fact they were charged 1%, resulting in $1.2 million in overpaid fees. Drake concealed the fraud for over three years by fabricating fee reports, sending misleading emails, and impersonating a fictitious person named 'Ron Stenson' to corroborate his lies, personally receiving approximately $900,000 in incentive compensation. Upon discovery, he admitted to the deception and warned the client that reporting him could harm her husband’s reputation; the SEC is now seeking a permanent injunction, disgorgement of ill-gotten gains with interest, and civil penalties.
Jeremy Drake, a former investment adviser with Los Angeles-based HCR Wealth Advisors, defrauded a high-profile professional athlete and his wife by falsely representing that they paid a special 'VIP' annual management fee of 0.15 to 0.20% of assets under management, when in reality they were charged 1%, resulting in $1.2 million in overpaid fees over more than three years. To conceal the fraud, Drake created and sent false documents, including deceptive fee reports and misleading emails, and even fabricated the identity of 'Ron Stenson'—a fictitious person he impersonated—to validate his claims when the clients questioned the fees. Drake personally received approximately $900,000 in incentive-based compensation tied to the inflated fees. When confronted, he admitted to the deception and threatened the client with reputational harm to her husband if she reported him. The SEC filed a complaint in the U.S. District Court for the Central District of California, charging Drake with violating and aiding and abetting the anti-fraud provisions of the Investment Advisers Act of 1940. The agency is seeking a permanent injunction, disgorgement of all ill-gotten gains plus interest, and civil penalties. The investigation, led by SEC attorneys M. Lance Jasper and Spencer E. Bendell, with litigation handled by Kristin Escalante, remains ongoing.
Exhibits & Attached Documents (1)
Extracted insights
- $1.20M $1.2 million $1M–$10M
- $900K $900,000 $100K–$1M
- person jeremy drake
- agency Securities and Exchange Commission
- Securities And Exchange Commission charged Jeremy Drake With Defrauding Two Clients
- Jeremy Drake concealed His Fraud By Creating False Documents
- Jeremy Drake deceived The Clients For More Than Three Years
- Drake’s Deception led The Clients To Pay $1.2 Million More In Management Fees
- Jeremy Drake received Approximately $900,000 Of Incentive-Based Compensation
- Jeremy Drake lied Repeatedly To The Clients And Their Representatives
- Jeremy Drake created The Persona Of “Ron Stenson”
- Jeremy Drake admitted To One Client That He Had Been Lying
- Jeremy Drake warned The Client That Reporting Could Result In Bad Publicity For Her Husband
- Securities And Exchange Commission charged Jeremy Drake With Violating Anti-Fraud Provisions Of The Investment Advisers Act Of 1940
- Securities And Exchange Commission is seeking A Permanent Injunction, Return Of Drake’s Ill-Gotten Gains Plus Interest, And Penalties
The Securities and Exchange Commission today charged investment adviser Jeremy Drake with defrauding two clients, a high profile professional athlete and the athlete’s wife, by deceiving them about the investment advisory fees they were paying. The SEC alleges that Drake went to elaborate lengths to conceal his fraud, including creating and sending false documents and masquerading as another person to corroborate his lies. The SEC alleges that Drake, then with Los Angeles-based HCR Wealth Advisors, deceived the clients for more than three years, telling them that they paid a special “VIP” annual rate of 0.15 to 0.20 percent of their assets under management when in fact they paid 1 percent. Drake’s deception led the clients to pay $1.2 million more in management fees than Drake represented. Drake personally received approximately $900,000 of incentive-based compensation based on the fees paid by the clients during the course of his deception. According to the SEC’s complaint filed in the U.S. District Court for the Central District of California, Drake repeatedly lied to the clients and their representatives and sent false and misleading emails, deceptive fee reports, and other fabricated documents. The complaint alleges that in June 2016, as one of the clients demanded an explanation about the fees, Drake created the persona of “Ron Stenson,” who purportedly corroborated Drake’s story. Upon discovery, the complaint alleges that Drake admitted to one of the clients that he had been lying and warned her that reporting his misconduct could result in bad publicity for her husband. “As alleged in our complaint, these two clients trusted Drake to manage their investments, but all the while Drake was lying to them and then tried to conceal his lies by fabricating documents and even acting as an imposter to back up his claims,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. The SEC charged Drake with violating and aiding and abetting violations of the anti-fraud provisions of the Investment Advisers Act of 1940. The SEC is seeking a permanent injunction, return of Drake’s allegedly ill-gotten gains plus interest, and penalties. The SEC’s investigation, which is continuing, has been conducted by M. Lance Jasper and Spencer E. Bendell, and the litigation will be led by Kristin Escalante.
The Securities and Exchange Commission today charged investment adviser Jeremy Drake with defrauding two clients, a high profile professional athlete and the athlete’s wife, by deceiving them about the investment advisory fees they were paying. The SEC alleges that Drake went to elaborate lengths to conceal his fraud, including creating and sending false documents and masquerading as another person to corroborate his lies. The SEC alleges that Drake, then with Los Angeles-based HCR Wealth Advisors, deceived the clients for more than three years, telling them that they paid a special “VIP” annual rate of 0.15 to 0.20 percent of their assets under management when in fact they paid 1 percent. Drake’s deception led the clients to pay $1.2 million more in management fees than Drake represented. Drake personally received approximately $900,000 of incentive-based compensation based on the fees paid by the clients during the course of his deception. According to the SEC’s complaint filed in the U.S. District Court for the Central District of California, Drake repeatedly lied to the clients and their representatives and sent false and misleading emails, deceptive fee reports, and other fabricated documents. The complaint alleges that in June 2016, as one of the clients demanded an explanation about the fees, Drake created the persona of “Ron Stenson,” who purportedly corroborated Drake’s story. Upon discovery, the complaint alleges that Drake admitted to one of the clients that he had been lying and warned her that reporting his misconduct could result in bad publicity for her husband. “As alleged in our complaint, these two clients trusted Drake to manage their investments, but all the while Drake was lying to them and then tried to conceal his lies by fabricating documents and even acting as an imposter to back up his claims,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. The SEC charged Drake with violating and aiding and abetting violations of the anti-fraud provisions of the Investment Advisers Act of 1940. The SEC is seeking a permanent injunction, return of Drake’s allegedly ill-gotten gains plus interest, and penalties. The SEC’s investigation, which is continuing, has been conducted by M. Lance Jasper and Spencer E. Bendell, and the litigation will be led by Kristin Escalante.