SEC Wins $1.18M Default Judgment Over Fabricated Form ADV Disclosures

A federal court has entered a final default judgment against AI Financial Education Foundation Ltd., a purported investment adviser the U.S. Securities and Exchange Commission charged with making material misrepresentations in a regulatory filing, ordering the firm to pay a civil penalty of $1,182,254.

Senior U.S. District Judge William J. Martínez of the U.S. District Court for the District of Colorado entered the judgment June 26 after AI Financial Education failed to appear in the litigation or answer the SEC’s complaint. The firm had until Dec. 10, 2025, to do so; it did not. Default was entered Jan. 2, 2026.

The judgment permanently enjoins AI Financial Education from future violations of Sections 204(a) and 207 of the Investment Advisers Act of 1940. Separately, the judgment permanently bars AI Financial Education, its owners, and its executive officers from filing a Form ADV as an exempt reporting adviser – a category of private fund advisers not required to register with the SEC.

As previously reported by AltsWire, the SEC filed the complaint against AI Financial Education in November 2025, one of six simultaneous actions against purported investment advisers alleged to have made misrepresentations and unsubstantiated statements in their Form ADV filings regarding office locations, assets under management, and clients.

In the case of AI Financial Education, the SEC alleged that in a July 2024 Form ADV filing, the firm claimed that it operated out of Denver-area office space, managed $10 million in assets in the United States, advised a private fund, and that a separate registered investment adviser reported information about that private fund on its own Form ADV. The SEC alleged the Denver-area office occupant had no knowledge of AI Financial Education or its purported chief executive officer, that the separate registered investment adviser had not reported information about the purported private fund, and that a search of the SEC’s public company database yielded no information on AI Financial Education. The firm also failed to respond to a request from SEC attorneys for records to substantiate the Form ADV disclosures, according to the complaint.

The civil penalty of $1,182,254 is due within 30 days of the judgment’s entry. The SEC may enforce the judgment through collection procedures, including the Federal Debt Collection Procedures Act.

The other five firms named in the November 2025 enforcement sweep were Bluesky Eagle Capital Management Ltd., Supreme Power Capital Management Ltd., AI Investment Education Foundation Ltd., Invesco Alpha Inc., and Adamant Stone Limited.

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