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SEC Charges Six Investment Advisers Over Form ADV Misrepresentations

By Mari Nicholson

Business professionals holding masks behind their backs in a lineup, corporate secrecy, anonymity, identity concealment, professional espionage.

The U.S. Securities and Exchange Commission announced charges against six investment advisers for allegedly making material misrepresentations and unsubstantiated statements in their Form ADV filings with the SEC regarding their organizations, office locations, assets under management, and clients. The complaints name:

  • Bluesky Eagle Capital Management Ltd.;
  • Supreme Power Capital Management Ltd.;
  • AI Financial Education Foundation Ltd. (AI Financial);
  • AI Investment Education Foundation Ltd. (AI Investment);
  • Invesco Alpha Inc.; and
  • Adamant Stone Limited.

Form ADV is the primary disclosure document used by investment advisers to register with the SEC and state securities authorities, providing critical information to investors and regulators.

The SEC’s complaints were brought separately in the U.S. District Court for the Southern District of New York (against Bluesky Eagle and Supreme Power) and the District of Colorado (against AI Financial, AI Investment, Invesco Alpha, and Adamant Stone). According to the SEC’s complaints, in their ADV filings submitted on various dates in 2023 and 2024, Bluesky Eagle, Supreme Power, AI Financial, and Adamant Stone each claimed to manage $10 million in assets in the United States, Invesco Alpha claimed to manage $5 million in assets, and AI Investment claimed to manage $1 million. Each firm also claimed to advise a private fund and that a separate registered investment adviser reported information about those private funds on its own Form ADV.

The SEC also alleges that Bluesky Eagle and Supreme Power claimed that they are public companies operating out of office space in New York City. AI Financial, AI Investment, Invesco Alpha, and Adamant Stone claimed that they operate out of office space in Denver. However, according to the complaints allege that the current business residents of the New York and Colorado office spaces have no knowledge of the entity or its purported management personnel, and the other adviser has not reported information about the purported private funds.

The complaints also allege that Bluesky Eagle and Supreme Power claimed to be public companies, but a search of the SEC’s public company database yields no information on either firm.

Additionally, the complaints allege that all six firms failed to respond to requests by the Commission to provide records to substantiate the information on forms, including the amount of AUM in the United States.

The SEC’s complaints charge Bluesky Eagle, Supreme Power, AI Financial, AI Investment, Invesco Alpha, and Adamant Stone with violations of Sections 204(a) and 207 of the Investment Advisers Act of 1940. The complaints seek injunctive relief and civil penalties.

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