In an SEC examination of Professional Investment Management (PIM), the firm claimed that it held nearly $7.7 million in a money market fund when in fact that amount totalled less than $7 million. The assets have since been frozen.
According to the SEC webite: “The SEC further alleges that Douglas Cowgill, who is the chief compliance officer as well as president of the firm, attempted to disguise this shortfall from SEC examiners by entering a fake trade in PIMs account records. The purported trade was later reversed. Cowgill allegedly provided additional falsified reports to SEC staff, and he later transferred funds from a cash account at another financial institution to eliminate the shortfall in the money market fund account. However, that cash account also was held for the benefit of clients, thus Cowgill merely moved the shortfall from one asset holding to another in an effort to avoid detection.”
Our complaint alleges that Cowgill went to extraordinary lengths to hide a significant shortfall in client assets, even providing manufactured documents to SEC staff, said Robert J. Burson, associate director of the SECs Chicago Regional Office. Fortunately our examiners and investigators diligently tested Cowgills false statements and confirmed the existence of the shortfall in an account holding the investments of many clients.
In response to the SECs request for emergency relief for investors, U.S. District Court Judge Algenon L. Marbley issued a temporary restraining order and imposed an asset freeze to protect client assets, according to the SEC’s press release.
PIM reportedly manages around $120 million in assets for an estimated 325 clients, including a number of retirement plans.
