The Securities and Exchange Commisson (SEC) filed fraud charges against Dawn J. Bennett, the founder and CEO of Benett Group Financial Services.
The Commission accused Bennett and her firm of exaggerating the amount of assets under management (AUM) and investment returns obtained for investors.
The Enforcement Division of the SEC alleged that Benett frequently touted to customers and in her paid radio program that her firm generated highly profitable investment returns.
Investing public are entitled to accurate information
In a statement, Sharon Binger, Director, SEC Philadelphia Regional Office said, “We allege that in a calculated effort to inflate their profile and prestige, Bennett and her firm overhyped the amount of assets they manage for customers and the actual returns on their investments.”
“The investing public is entitled to a level of confidence that information they receive about brokerage and advisory services is accurate, and this case shows that so-called financial experts on the radio are often merely advertisers who may not be doing so truthfully,” added Binger.
SEC allegations against Bennett
She claimed that Bennett Group Financial Services was in the “top 1%” of all the firms worldwide. Bennett did not disclose that the returns were computed for a model portfolio, and not based on actual investor performance.
Additionally, the SEC alleged that Benett and her firm claimed that its assets under management (AUM) was more than $2 billion, but the actual amount was significantly less (no more than one-fifth of that claimed amount).
The SEC Enforcement Division found that Bennett and her firm made material miss statements and omission from 2009 to 2011 to attract new clients by claiming industry success and impressive investment returns.
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Bennett was ranked fifth in the “Top 100 Women Financial Advisors” after falsely claiming in three submissions to a media organization that her firm’s AUM was around $1.1 billion to $1.8 billion. She was also ranked 2nd in the “2011 Top Advisors” in Washington D.C.
Bennet falsely claimed that she and her firm managed $1.5 billion to more than $2 billion of assets during at least 18 radio programs aired between 2010 and 2011.
Bennet and her firm never manage assets more than $407 million. Benett Group and its CEO violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5, and Sections 206(1) and 206(2) of the Advisers Act, according to the SEC.