SEC Obtains Final Judgment Against RIA Charged With Misappropriating Client Funds
The U.S. Securities and Exchange Commission obtained final judgments against Santa Barbara, Calif.-based investment adviser, El Capitan Advisors Inc., and its principal, Andrew Daniel Nash, who the SEC charged with misappropriating $15.3 million from an advisory client to whom they owed a fiduciary duty.
Nash, on behalf of El Capitan, provided investment management services, advising El Capitan clients as to the advisability of investing in exchange-traded funds, mutual funds, bonds, and other investment options. For these services, El Capitan generally charged an annual fee of 1% of a client’s assets under management.
The SEC’s complaint, filed on June 4, 2025, in the Central District of California, alleged that, in June 2021, Nash and El Capitan entered into an agreement with a public company advisory client to provide cash management services for tens of millions of dollars of the client’s money held at various financial institutions. In reality, according to the SEC’s complaint, in breach of his and El Capitan’s fiduciary duties as investment advisers, Nash, age 48, transferred over $15 million out of the client’s accounts and spent a portion of that money to buy a $4.6 million home in Santa Barbara.
The complaint further alleged that, to conceal his theft, Nash fabricated account statements purporting to show the client’s money still held at the financial institutions. Additionally, according to the complaint, Nash filed Form ADV and El Capitan reports with the SEC in 2022 and 2023 that materially overstated El Capitan’s AUM.
For example, in the Form ADV that El Capitan filed in 2022, El Capitan reported that it had over $3.6 billion in regulatory AUM as of March 2022. Then, in 2023, El Capitan reported that it had more than $7.4 billion in AUM as of Dec. 31, 2022. Both these statements about were materially false and misleading. El Capitan managed client accounts at a single financial institution. According to financial records, as of March 7, 2022, the total value of the assets held in those accounts was less than $62 million, approximately 1.7% of El Capitan’s claimed AUM; as of Dec. 31, 2022, the total was less than $85 million, approximately 1.1% of El Capitan’s claimed AUM.
Nash and El Capitan, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of final judgments permanently enjoining them from violating Sections 206(1), 206(2), and 207 of the Investment Advisers Act of 1940 by committing or engaging in specified actions or activities relevant to those provisions. The final judgments also orders: Nash to disgorge ill-gotten gains of $4.6 million plus prejudgment interest of $791,153.48; El Capitan to disgorge ill-gotten gains of $10.7 million plus prejudgment interest of $1,840,291.82; and Nash to pay a civil penalty of $3,456,942.
Click here to visit AltsWire directory page.
