The Securities and Exchange Commission (SEC) last week barred a Santa Barbara, Calif-based financial advisor from the securities industry who allegedly in 2022 misappropriated $4.6 million in funds from a client of his firm. The advisor then falsified bank documents to hide the theft of these client funds. The advisor, Andrew Nash of El Capitan Advisors, used the funds to buy a house, according to the SEC.
In addition, Nash caused El Capitan to file Form ADV reports with the SEC in 2022 and 2023, which falsely stated El Capitan had over $3.6 billion and over $7.4 billion in assets under management, respectively. In fact, El Capitan managed far less than $1 billion in assets.
Nash, 48, was the CEO, founder, and over 50% owner of El Capitan Advisors. He agreed to the settlement, dated June 17, with the SEC without admitting or denying the Commission’s findings in the matter.
Nash had worked in the investment advisory industry since 2019, according to public disclosure records. The phone for the firm was no longer in service on Monday, and Nash could not be reached to comment.
The SEC’s complaint, filed on June 4, in the Central District of California, alleged that, in June 2021, Nash and El Capitan entered into an agreement with a public company advisory client to provide cash management services for tens of millions of dollars of the client’s money held at various financial institutions.
According to the complaint, which does not name the company, it is a Nevada-based public company engaged in a cannabis-related industry.
In reality, according to the SEC’s complaint, in breach of his and El Capitan’s fiduciary duties as investment advisors, Nash transferred over $15 million out of the client’s accounts and spent a portion of that money to buy a $4.6 million home in Santa Barbara, California.
The complaint further alleged that, to conceal his theft, Nash fabricated account statements purporting to show the client’s money still held at the financial institutions. Additionally, according to the complaint, Nash filed Form ADV reports with the SEC that materially overstated El Capitan’s assets under management.
The SEC’s final judgments also orders Nash to disgorge $4.6 million plus prejudgment interest of $791,000; El Capitan to disgorge $10.7 million plus prejudgment interest of $1,8 million; and Nash to pay a civil penalty of $3.5 million.
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