The Securities and Exchange Commission last week announced charges against a San Diego, CA-based investment advisory firm, its chief executive, chief compliance officer, and another employee for misleading investors.

The Securities and Exchange Commission last week announced charges against a San Diego, CA-based investment advisory firm, its chief executive, chief compliance officer and another employee for misleading investors.

The SEC alleges that Total Wealth Management and its owner and CEO Jacob Cooper entered into agreements through which they paid themselves kickbacks or so-called “revenue sharing fees.”

Total Wealth and Cooper “materially misrepresented the extent of the due diligence conducted on the investments they recommended,” the US authority said.

Total Wealth’s CCO Nathan McNamee and investment advisor representative Douglas Shoemaker also defrauded clients by failing to disclose conflicts of interest and concealing the kickbacks they received from the investments they recommended.

In the order instituting administrative proceedings, the SEC alleges that Total Wealth and Cooper “willfully violated the anti-fraud provisions of the federal securities laws.”

McNamee and Shoemaker also “violated or aided and abetted violations of the antifraud provisions,” the authority said.  They are charged with violations of Form ADV disclosure rules and the custody rule. 

The SEC’s order seeks return of allegedly ill-gotten gains plus interest, financial penalties, an accounting, and remedial relief.