Another Private Fund Enforcement Action, New NASAA IAR Continuing Ed Resources, FINRA Gateway Update, SEC Announces ESG Task Force and More: Lessons Learned and Worth Reading for April 2021

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Lessons Learned

Private Fund Manager Blows Private Offering Exemption and Gets Banned from Industry. The SEC found that private fund manager and real estate development firm, Ettro Capital Management Corp. (“ECM”) made material misstatements and omissions to prospective investors about (1) the past performance of their Fund; (2) capital raised and assets under management; and (3) ECM’s investment management and real estate development experience. ECM also blew its private offering exemption by advertising a private real estate fund offering its unrestricted website. Peter Ettro, ECM’s founder, received an industry bar and a $60,000 fine. The lesson learned is that unregistered advisers are still subject to the SEC’s jurisdiction. Moreover, the SEC does not look kindly on firms that tell investors fairy tales about their track record, capital raised and fund investments. Contributed by Rochelle A. Truzzi, Managing Director.

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