SEC charges California RIA and its owner with account statement fraud

Tweed Investment Services Inc. and owner Robert Russel Tweed were allegedly trying to cover up their inflated investment performance

Oct 4, 2017 @ 5:16 pm

By Greg Iacurci

The Securities and Exchange Commission has charged a California advisory shop, Tweed Investment Services Inc., and its owner with fraud for allegedly issuing false and misleading account statements that inflated investment profitability.

The firm, based in San Marino, Calif., and owner Robert Russel Tweed raised $1.7 million from 24 investors for a fund they managed — the Athenian Fund — but subsequently invested the money in two other investments that ultimately lost roughly $800,000, according to the SEC.

They then concealed the losses by issuing phony account statements that made the fund, which used a quantitative stock trading strategy, appear profitable, and doled out more money to some investors than they were entitled due to the inflated asset values, the SEC alleged in a complaint filed Oct. 2 in California district court.

The complaint, Securities and Exchange Commission v. Tweed Financial Services, Inc. et al, seeks permanent injunctions and civil penalties for the fraud, which the SEC claims Mr. Tweed and his firm perpetuated for years.

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