This past Monday, the Securities and Exchange Commission (SEC) announced the filing of fraud charges against Florida-based investment adviser Arthur F. Jacob and his investment firm, Innovative Business Solutions LLC., alleging he deceived his clients for at least five years and maybe longer.
In the SEC order, setting forth the administrative proceedings, the SEC Enforcement Division alleged from at least mid-2009 through July 2014, Mr. Jacob and his company Innovative Business Solutions:
- Misrepresented the risks and profitability of investments he purchased for his investment advisory clients. Despite being aware that certain exchange traded funds (ETFs) he was purchasing carried investment risk, he represented to clients the investment strategy he was using was safe, carried low or no risk, and would produce predictable profits.
- Concealed from clients his disciplinary history, which included being disbarred as a lawyer for misappropriating client funds and other professional misconduct.
- Failed to disclose neither he or his firm were registered with the SEC or any state as investment advisers. Rather, Jacob told clients that he and IBS were not required to register as an investment adviser.
- Jacob provided false information to a brokerage firm regarding the advisory services he and IBS provided so he could retain trading authorization over clients’ accounts and thereby continue to receive advisory fees.
The SEC’s order alleges that Jacob and IBS willfully violated the anti-fraud provisions of federal securities laws and an SEC antifraud rule. The matter will be set for a public hearing before an administrative law judge who will be charged with adjudicating the matter and determining what if any penalties and compensation are appropriate.
The experienced securities litigation attorneys at Colling Gilbert Wright & Carter have litigated and resolved hundreds of FINRA arbitration claims over questionable Wall Street practices. We are currently investigating Athur F. Jacob, CPA and IBS to determine if individual claims should be filed on behalf of the former clients. If you believe you lost money due to misrepresentations or fraud on the part of Mr. Jacob, please contact us for a free case evaluation.