The SEC on Wednesday charged an investment advisory firm based in Litchfield, Conn., and its CEO with putting $19 million of investor money, including elderly clients' retirement savings, in unsuitable, illiquid investments and secretly pocketing hefty commissions.
The Securities and Exchange Commission complaint alleges that between 2014 and 2017, Temenos Advisory Inc. and CEO George L. Taylor, 62, steered clients into four risky, illiquid private offerings.
While Mr. Taylor and his firm charged advisory fees for unbiased financial advice, the SEC said they concealed from their clients the high commissions they were earning, according to a press release. The SEC also alleges that Temenos and Mr. Taylor "grossly overbilled" some of their clients, according to the release.
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The SEC claims Temenos and Mr. Taylor fraudulently misled clients about the risks and prospects of their investments, including cash and ownership stakes in private companies they recommended.
Neither Mr. Taylor nor his firm could be reached for comment.
In addition to his role at Temenos, Mr. Taylor has been registered with Fairport Capital Inc., also of Litchfield, since 1998 , according to his BrokerCheck profile. Fairport is not affiliated with Temenos, according to the SEC. He worked at New England Securities from 1985 to 1997 and First Investors Corp. from 1983 to 1985.
The SEC complaint was filed in federal court in Connecticut. It charges the defendants with violating the anti-fraud and registration provisions of the federal securities laws. The SEC is seeking disgorgement of ill-gotten gains plus interest, penalties and permanent injunctions.
