Beware of scammers posing as investment firms. Here’s an alarming case of Allan Boomer, a finance professional who allegedly misappropriated $220,000+.
With so many financial scams happening these days, I think it’s vital for people to learn about these cases as much as possible.
SEC: Allan Boomer and Two Execs, Fined for Alleged $220K Misappropriation
Two top executives from the New York-based investment firm Momentum Advisors, including its former chief compliance officer, are accused of misappropriating more than $220,000, according to a recent announcement from the Securities and Exchange Commission (SEC).
Investment firms are entrusted with managing significant sums on behalf of the public and are bound by SEC regulations to safeguard client assets, maintain transparency, and ensure accurate reporting of financial transactions.
The SEC alleges that Tiffany Hawkins, a former Chief Operating Officer and partner, and Allan Boomer, the firm’s former Chief Compliance Officer and current partner, violated their fiduciary duties by misusing funds from client portfolios.
Without admitting or denying the SEC’s allegations, both Hawkins and Boomer have agreed to settle the charges. Details of the settlement, including any penalties or sanctions, were not disclosed in the SEC’s press release.
SEC Charges Adviser, for Misusing Client Funds
March 7, 2025, in the District of Columbia —
The Securities and Exchange Commission (SEC) announced that it had settled charges against Momentum Advisors LLC, its former managing partner Allan J. Boomer, and its former chief operating officer and partner Tiffany L. Hawkins. The charges were brought against Boomer and Hawkins for breaching their fiduciary duties by misusing fund and portfolio company assets, respectively.
According to the orders issued by the SEC, Hawkins stole roughly $223,000 from portfolio firms of a private fund that she managed with Boomer and that was advised by Momentum Advisors. This theft occurred between at least August 2021 and February 2024. To be more specific, Hawkins utilised various business debit cards in more than one hundred transactions to pay for personal costs like as holidays, clothing, and other expenses. As a result, she was compensated more than the amount that was authorised for her income.
By the directives, Hawkins hid her inappropriate behaviour from Momentum Advisors, the bookkeeper of the portfolio firms, and the staff of the SEC. Furthermore, Boomer failed to exercise reasonable supervision over Hawkins despite the fact that there were warning signs that she was misappropriating funds.
Boomer is also found to have caused the fund to pay a business debt that should have been paid by an entity that he and Hawkins controlled, which resulted in an unearned benefit to the entity in the amount of $346,904; additionally, the order against Boomer finds that Momentum Advisors failed to adopt and implement adequate policies and procedures, as well as to have the fund audited as required.
“The orders find that Hawkins and Boomer violated their fiduciary duties and misused fund and portfolio company assets for their benefit, all to the detriment of their clients,” stated Thomas P. Smith, Jr., Associate Regional Director in the New York Regional Office. “This is all to the detriment of their clients for whom they were responsible.”
Based on the orders, it has been determined that Hawkins and Boomer have committed violations of the antifraud provisions of the Investment Advisers Act of 1940, while Momentum Advisors has committed violations of the compliance and custody rule provisions of the Advisers Act. Even though they did not acknowledge or refute the conclusions of the SEC, Hawkins, Boomer, and Momentum Advisors gave their assent to the filing of cease-and-desist orders.
Additionally, Hawkins agreed to pay a $200,000 civil penalty and to be subject to an associational restriction; Boomer agreed to pay a $80,000 civil penalty and to be subject to a 12-month supervisory suspension; and Momentum Advisors agreed to a censure and to pay a $235,000 civil penalty.
Alexander M. Levine, James Flynn, and Steven G. Rawlings, all of the New York Regional Office, were the individuals who were responsible for conducting the investigation that was undertaken by the Securities and Exchange Commission (SEC). In the New York Regional Office of the Division of Examinations, Emanuel S. Asmar, Majid S. Mahmood, and Arjuman Sultana were the individuals who carried out the examination that ultimately resulted in the probe.
In New York, cases involving investment advisers and executives misusing funds and portfolio company assets have drawn significant attention from regulators and the public. These incidents not only result in substantial financial losses but also erode investor confidence in the financial system.
Cases Similar to Allan Boomer:
While comprehensive statistics on such misconduct are limited, several high-profile cases illustrate the severity and impact of these violations:
- Momentum Advisors Case: Between August 2021 and February 2024, Tiffany Hawkins, a former Chief Operating Officer, and Allan Boomer, a former Chief Compliance Officer at Momentum Advisors, misappropriated approximately $223,000 from portfolio companies of a private fund they managed. Hawkins used portfolio company debit cards for over 100 personal transactions, including vacations and clothing, and received compensation exceeding her authorized salary. Boomer facilitated the misuse by causing the private fund to pay a business debt that should have been covered by a third-party entity they controlled. Both settled with the SEC without admitting or denying the findings.
- Hudson Valley Wealth Management: Christopher Conover, founder of Hudson Valley Wealth Management, and his firm were fined nearly $978,000 by the SEC for undisclosed conflicts of interest. From 2017 to 2021, Conover advised clients to invest in films produced by a company from which he received $530,000 in compensation, a relationship he failed to disclose adequately. Additionally, he mishandled client redemption requests, favoring certain investors over others.
- Ken Leech and Western Asset Management: Ken Leech, former co-chief investment officer at Western Asset Management, was charged with orchestrating a $600 million “cherry-picking” scheme. He allegedly allocated profitable trades to favored clients while assigning losses to others, leading to significant client withdrawals and a 22% drop in the parent company’s share price. Leech faces multiple fraud charges, each carrying up to 20 years in prison.
Is Something Being Done?
To combat and reduce such financial misconduct, regulatory bodies have implemented several measures:
- Enhanced Oversight by the SEC: The SEC has increased scrutiny of investment advisers, focusing on compliance with fiduciary duties and accurate disclosure of conflicts of interest. Regular examinations and risk alerts aim to identify and address potential violations promptly.
- Investor Protection Initiatives: The New York State Attorney General’s office provides resources and guidance to investors, including FAQs on arbitration and mediation of disputes, to help them understand their rights and avenues for recourse.
- Internal Controls and Compliance Programs: Firms are encouraged to establish robust internal controls to prevent misuse of assets. This includes clear policies on trade allocations, compensation, and disclosure of potential conflicts, as well as regular training for employees on ethical practices.
- Public Awareness and Education: Regulators and industry groups promote investor education to help individuals recognize signs of potential fraud and understand the importance of due diligence when selecting financial advisers.
Conclusion
Misuse of funds and portfolio company assets by investment advisers and executives in New York underscores the need for vigilant regulatory oversight and robust internal controls within financial firms. Through enhanced enforcement actions, investor education, and stringent compliance requirements, efforts are ongoing to protect investors and uphold the integrity of the financial markets.
