WASHINGTON, March 15 (Xinhua) -- A registered investment adviser and one of its former executives agreed to be fined for manipulating an auction as well as failing to exercise fiduciary duty, the U.S. Securities and Exchange Commission (SEC) said on Friday.
Grant Gardner Rogers, former chief operating officer (COO) of a registered investment adviser called Talimco LLC, was selling a commercial real estate asset in 2015, according to the SEC.
"Talimco and Rogers owed its selling client a fiduciary duty, which included an obligation to take steps to use its best efforts to maximize the price obtained for the asset by identifying willing bidders," said the SEC.
However, the SEC found that Rogers introduced the firm's affiliated private fund client to the bidding and meanwhile convinced two unwilling bidders to participate in the auction.
"As a result of this manipulation, Talimco's private fund client was the highest bidder and acquired the asset, only to then later sell it for a substantial profit," the SEC said.
"By rigging the auction, Talimco and Rogers failed to fulfill their fiduciary duty to their client," said Daniel Michael, chief of the SEC Enforcement Division's Complex Financial Instruments Unit.
Without admitting or denying the findings, Talimco and Rogers both consented to a cease-and-desist order and agreed to pay a penalty, the SEC said.
"Investment adviser firms are expected to have controls in place to detect and disclose conflicts of interest," Michael said.
"This action evidences the vigilance of the SEC's exam and enforcement staff in identifying investments advisers that exploit client relationships and harm investors," he said.
