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SEC Obtains Judgment Against Former Chief Compliance Officer of Investment Adviser

(HedgeCo.Net) An Illinois federal court entered a final judgment against David Goulding, the former Chief Compliance Officer of The Nutmeg Group, LLC, a registered investment adviser that the SEC previously charged with fraud for misappropriating client assets and misrepresenting the value of fifteen investment pools.

In an order issued on January 21, 2020, the court found that Goulding aided and abetted Nutmeg’s violations of the Investment Advisers Act of 1940. The court found that Goulding helped Nutmeg commingle investor funds with personal assets, misled investors about the value of their investments, oversaw flawed internal systems and methods for valuing and reporting investments, and transferred investor money to companies controlled by his family. The court also found that Goulding acted recklessly by taking on his compliance role despite “his complete lack of qualifications for that job.” Goulding – who earlier was enjoined from violating the antifraud provisions of Sections 204, 206(1), 206(2), and 206(4) of the Advisers Act – is ordered to pay a total of $28,935 in disgorgement and prejudgment interest. The SEC previously barred Goulding from associating with any registered investment adviser.

The court also entered a final judgment on January 30, 2020 against two companies owned by Goulding – David Goulding, Inc. and David Samuel, LLC – for receiving ill-gotten gains derived from misconduct by Goulding and his father, Randall Goulding.

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