An adviser and host of a radio show called “Financial Myth Busting” has been busted by the Securities and Exchange Commission for allegedly inflating her firm's assets under management by as much as five times the actual amount and exaggerating investment returns.
The SEC said that Dawn J. Bennett, founder of Bennett Group Financial Services in Washington, claimed to have more than $2 billion in assets, but the most that Bennett Group ever managed was $407 million.
Ms. Bennett, 53, also allegedly touted the firm's highly profitable investment returns and said that those returns put Bennett Group in the “top 1%” of firms in the world, the SEC said. But those purported returns were taken from a model portfolio and not representative of any actual customer returns, according to the SEC's complaint.
“Bennett and her firm made material misstatements and omissions from at least 2009 to February 2011 when they had a fledgling investment advisory business to which they hoped to attract new clients by luring them with claims of industry success and impressive investment returns,” the SEC said, adding that Ms. Bennett had made additional misstatements to the SEC to try and “cover up” their prior fraud.
TOP ADVISERS LIST
The misstatements landed Ms. Bennett fifth on Barron's list of “Top 100 Women Financial Advisors,” according the SEC. She was also second on the “2011 Top Advisors” in Washington, D.C., list, the SEC said. The firm then used those false rankings to market to customers, the SEC said.
Ms. Bennett is currently registered with Western International Securities where they operate under the Bennett Group name. She did not immediately return a message seeking comment.
Bennett Group is no longer registered with the SEC. In its last Form ADV, the firm claims to have had $1.16 million in assets under management.
“We allege that in a calculated effort to inflate their profile and prestige, Bennett and her firm over-hyped the amount of assets they manage for customers and the actual returns on their investments,” said Sharon Binger, director of the SEC's Philadelphia Regional Office, in a statement. “The investing public is entitled to a level of confidence that information they receive about brokerage and advisory services is accurate, and this case shows that so-called financial experts on the radio are often merely advertisers who may not be doing so truthfully.”