July 3, 2019 | AtoZ Markets – The U.S. Securities and Exchange Commission (SEC) has recently charged Fieldstone Financial Management Group LLC and its principal Kristofor R. Behn with fraud, for misconduct with retail investment advisory clients.
“1- Fieldstone Financial Management Group, LLC is a Delaware limited liability company with its principal place of business in Foxboro, Massachusetts. Fieldstone was formerly registered with the Commission as an investment adviser during two periods: May 23, 2001 to September 3, 2015, and March 25, 2016 to March 28, 2019. Before the entry of this Order, Fieldstone entered into an Asset Purchase Agreement for the purpose of selling certain of its assets to another registered investment adviser.
“2. Kristofor R. Behn, age 46, resides in Foxboro, Massachusetts. Behn founded Fieldstone and was its managing member and chief compliance officer during the relevant period. He was its sole owner until April 2017 and its 89 percent owner thereafter. At all relevant times, Behn controlled Fieldstone. From March 24, 2015 to May 4, 2016, Behn was an investment adviser representative of a registered investment adviser separate from Fieldstone. During this period, he advised many of the same clients he advised while he was associated with Fieldstone” As the first two provisions of the SEC notice mentioned.
$275,000 fine and permanent ban
The notice the SEC published yesterday said that the Behn abused one of the investors’ funds that reached up to $500,000, to pay for personal expenses.
The SEC cited in its notice that around 40 retail clients of Behn and Fieldstone invested more than $7 million in Aequitas securities, which still were subject to a previous Commission enforcement action.
The regulator charged Behn and Fieldstone of deliberately concealing clients that Aequitas had provided Fieldstone with a $1.5 million loan and access to a $2 million line of credit.
That resulted with the SEC stressing that Behn neglected his duties as an investment adviser.
The SEC decision that fined Fieldstone and Behn $275,000, concluded that both of the aforementioned must cease and desist from future violations.
It is worth mentioning also that the decision has banned Behn permanently from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.