Securities Regulation Keyed to Coffee
Valicenti Advisory Services, Inc. v. Securities and Exchange Commission
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A registered investment adviser, Valicenti Advisory Services, Inc. (VAS) (Defendant ), a registered investment adviser, arranged materials for dispersal to potential clients promoting VAS's past performance. Pieces of sales literature, prepared under the close supervision of VAS’ CEO Valicenti, by VAS’s marketing manager, were incorporated in those materials. The 1991 Chart, the first piece of sales literature, allegedly shows the rates of return realized by a merging of VAS discretionary accounts over the course of five years, from 1987-1991. Although, the 1991 Chart was based on between a mere 13-19 out of the 74 to 120 accounts that, during the years in question, fall under Valicenti’s definition. The marketing manager at VAS suggested multiple changes to apply to the 1991 Chart so that it reflects a more honest merging of VAS accounts with Valicentirefusing all recommendations. VAS was investigated by the SEC for fraud under the IAA and discovered the anti-fraud provisions of the IAA had been purposefully violated by both petitioners. So, petitioners with censure were sanctioned by the SEC, fines, a cease and desist order, and a condition that petitioners send copies of the SEC’s opinion and order to every current client.
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