SEC seeking sanctions for former Florida investment advisor over alleged $17M client fraud

The Securities and Exchange Commission has filed civil charges against a Florida-based investment adviser and two companies under his control, alleging they defrauded dozens of clients – many of whom are Venezuelan nationals – out of more than $17 million over a nearly decade-long period.

Filed in the US District Court for the Southern District of Florida, the complaint accuses Andrew H. Jacobus of misappropriating client assets through his now-defunct advisory firms Kronus Financial and Finser International.

According to a statement from the SEC published Thursday, 62-year-old Jacobus raised approximately $39.7 million from 40 clients between May 2015 and April 2024 under the guise of investing in IPOs and private investment funds.

Clients were allegedly told their money would be invested in vehicles such as the Corfiser SIMI Fund – later rebranded as the Kronus High Yield Fund – and various fixed or variable interest portfolios. In reality, regulators say, those funds were diverted to support personal expenses and other unrelated financial activities.

Kronus Financial Coporation and Finser, the companies through which Jacobus reportedly orchestrated the scheme, were dissolved in September last year. Finser and Jacobus also previously received a cease and desist from the SEC in 2020, according to his IAPD record.

The SEC's complaint highlights how Jacobus, acting through his firms, routinely provided falsified monthly account statements and fabricated performance newsletters. These communications showed consistent positive returns, which the SEC claims were designed to mask the absence of actual investments and encourage clients to continue or increase their contributions.

“Jacobus misled clients about, among other things, the legitimacy of and returns on their investments, access to their money, and the nature and balance of their investments,” the SEC stated in its release. “Despite the defendants’ representations that client funds would be invested in securities, they misappropriated over $17.3 million of client funds.”

Among the victims were elderly individuals and clergy from multiple Venezuelan Catholic dioceses, who together accounted for approximately $3.2 million in losses. The SEC also alleges that $7.8 million of the total client funds were used to make Ponzi-like payments to earlier investors.

Rather than serve his clients, the regulator claims Jacobus used their funds for mortgage payments, private school tuition, travel, luxury vehicles, and designer shopping. Additionally, he allegedly diverted $10.8 million from brokerage accounts he managed, and provided falsified statements to conceal the true, diminished balances.

The complaint also outlines how Jacobus sought to further mislead clients attempting to redeem their investments.

“Several clients received emails purporting to be from an entity which Jacobus testified was Kronus’s offshore law firm,” the complaint said, describing how clients were told account closures would not be honored for 12 months.

In reality, the SEC says the law firm never sent those emails, and the address used to send them, which apparently did not belong to the firm, were traced back to a domain controlled by Jacobus.

The SEC is pursuing a permanent injunction, civil penalties, and disgorgement of ill-gotten gains. Jacobus, who is facing separate criminal proceedings in Florida for grand theft, has pleaded not guilty.

Finser’s registration as an RIA was formally withdrawn in 2021, though the firm continued operating until at least October of that year. Kronus was administratively dissolved in 2024.