According to the SEC's complaint, Leila Jenkins and her investment advisory firm, Locke Capital in Rhode Island and New York, allegedly made up so-called confidential client accounts, purportedly based in Switzerland, and repeatedly claimed the accounts contained more than $1 billion in assets that she managed. From at least 2003 to 2009, falsehoods concerning the confidential accounts were communicated in brochures, meetings, submissions to online databases that prospective clients used to select money managers and in SEC filings, the commission said.
Besides the invented client and assets under management, the SEC's complaint alleged several other lies Jenkins and her firm told to investors, including misrepresenting Locke's performance for years in which she had no clients and deceiving clients about the makeup of the firm, including the number, identity and role of its employees.
"In this case, the conduct was particularly egregious because Jenkins lied to the SEC staff to try to escape detection," said George Curtis, deputy director of the SEC's division of enforcement.
Jenkins has been charged with several violations and faces a monetary penalty and a permanent injunction against future violations of the antifraud and other provisions of securities laws.