SEC Takes Action Against Lufkin Advisors for Crypto Fraud
In a significant move, the U.S. Securities and Exchange Commission (SEC) has revoked the registration of Lufkin Advisors LLC due to fraudulent activities and mismanagement of crypto assets. Lufkin Advisors offered a settlement, and the SEC accepted it, leading to the revocation of their registration.
The SEC found that Lufkin Advisors had engaged in various fraudulent activities, including undisclosed investments related to the spouse of the firm’s principal, improper accounting practices, and mismanagement of crypto assets. They also failed to monitor investment values and adhere to statutory requirements such as custody of assets, report accuracy, and maintenance of adviser records.
To prevent future violations, the SEC has permanently enjoined Lufkin Advisors from multiple sections of the Advisers Act and corresponding rules. Additionally, the SEC has revoked their registration. It’s important to note that Lufkin Advisors has consented to the order, without admitting or denying most of the findings except for the SEC’s jurisdiction and certain conclusions.
This action serves as a reminder of the regulatory scrutiny faced by firms operating in the crypto industry, emphasizing the need for transparency and compliance with established guidelines.