(Article from Registered Funds Regulatory Update, January 2026)
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On November 17, 2025, the SEC announced civil actions against six purported investment advisers for allegedly making material misrepresentations and unsubstantiated statements in Form ADV filings made between 2023 and 2024. The civil actions follow the Department of Justice’s indictment of Hong Kong resident, Guanhua Su, for his alleged role in a complex securities fraud scheme. The SEC Complaints relate to a purported “ramp-and-dump” scheme that allegedly used false and deceptive adviser forms to scam investors out of hundreds of millions of dollars. The DOJ indictment alleges that the six purported advisers were among at least ten “shell entities” created by Su and his co-conspirators.
The Complaints were filed separately in November 2025, in the United States District Courts for the Southern District of New York and the District of Colorado alleging that the firms made misrepresentations concerning their organizational structures, office locations, assets under management, and client relationships. Specifically, the Complaints claimed that each firm managed significant assets ranging from $1 to $10 million but failed to substantiate them when requested by the SEC. The Complaints also allege that the firms misrepresented themselves as operating from offices in New York City and Denver, but the purported office spaces in both cities had no knowledge of these firms or their personnel. For instance, a search of one firm’s address reportedly revealed that the space was actually occupied by a jewelry store located in a strip mall. Additionally, the firms claimed various corporate statuses, with two firms asserting that they were public companies, despite the absence of any such information in the SEC’s public company database.
The Complaints charge each firm with certain recordkeeping and material misstatement provisions of the Advisers Act and seek injunctive relief and civil penalties.
SEC Litigation Releases, SEC Charges Six Investment Advisers with Making Misrepresentations in Forms Filed with the Agency (Nov. 17, 2025), available at:
https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26416.
DOJ Press Release, Hong Kong Businessman Indicted for Role in Filing False SEC Investment Adviser Forms on behalf of Sham Entities Used in Ramp-and-Dump Scheme (Nov. 14, 2025), available at:
https://www.justice.gov/opa/pr/hong-kong-businessman-indicted-role-filing-false-sec-investment-adviser-forms-behalf-sham.