Two top executives at Advanced Equities Inc., a Chicago
venture capital and investment banking firm that once owned a leading independent broker-dealer, disclosed that they received a notice from the Securities and Exchange Commission that they are under investigation and charges may be brought.
Keith Daubenspeck, chairman and co-founder of parent firm Advanced Equities Financial Corp., according to the firm's website, and Dwight Badger, a co-founder and CEO, each disclosed in a broker registration filing that they received “Wells notices” from the SEC in January.
The two men, in identical disclosures on the matter, said that the notice informed them that staff in the SEC's regional Chicago office are considering recommending to the SEC that an administrative proceeding be brought against the pair "in connection with a private offering in 2009.” Neither provided details about the offering.
“It's confidential and we're not going to discuss it,” said Amal Amin, the firm's in-house attorney. “We're aware of the allegations and we're going to defend ourselves.”
“I am addressing the staff's concerns and I am prepared to aggressively defend myself should it become necessary,” the men said in their disclosures.
Advanced Equities is the onetime owner of First Allied Securities, a top indie B-D with around 1,000 reps. The firm sold First Allied to
private equity investors Lovell Minnick Partners LLC last year.
SEC spokesman John Nester declined to comment on the Wells notices sent to the two Advanced Equities executives.
A Wells notice lets the recipient know that the SEC enforcement division staff intends to recommend to the commission that charges be brought against the individual, but it gives the respondent about 30 days to persuade the staff not to take action, Mr. Nester said. The recipients will often request more time to respond to the notice and may receive that additional period, he said.
If the SEC staff recommends charges to the commission, it will include any response to the Wells notice.
Advanced Equities says on its site that it is a “source of late-stage
private equity to technology companies" financed by
venture capital firms and that it provides investment banking services. It also offers investment strategy advice to institutions and high net-worth individuals, according to the site. The firm also has offices in New York, San Francisco and London, the site says.
(This story first appeared in Crain's Chicago Business, a sister publication of InvestmentNews)
