CFTC issues Convergent Wealth Advisors a $800K penalty for falsified investment statements

cftc penalty

The U.S. Commodity Futures Trading Commission (CFTC) today filed an Order instituting proceedings and settling charges against Convergent Wealth Advisors LLC (Convergence), an investment advisory firm located in Potomac, Maryland.

The CFTC Order requires Convergent to pay an $800,000 civil monetary penalty and prohibits Convergent from violating the provisions of the Commodity Exchange Act and CFTC Regulations, as charged.

The CFTC Order finds that from 2007 to 2014, David Zier, in connection with his operation of ZAM LLC (ZAM) solicited certain clients of Convergent, among other individuals, for investment in ZAM. According to the Order, Zier solicited Convergent clients for investment in ZAM while he was an agent of Convergent.

Zier also drew upon Convergent resources, such as Convergent’s operations personnel, to execute certain ZAM related client transactions. Accordingly, the Order finds that Convergent, Zier’s employer, is responsible for Zier’s acts and omissions.

In connection with those solicitations, the Order finds that Zier made false representations as to ZAM’s performance.

For example, according to the Order:

  1. Zier represented ZAM as profitable, when, in reality, ZAM had suffered substantial losses, and
  2. Zier fabricated false performance data that he provided to existing ZAM investors to conceal ZAM’s losses.

According to the Order, Convergent had the ability to monitor ZAM’s financial accounts and Zier’s e-mail correspondence relating to ZAM administration, and in 2014, Convergent compliance personnel discovered that certain of ZAM’s account statements and the performance reports, being provided to Convergent clients who were participants in ZAM, were inconsistent.

From December 23, 2010, until Zier’s death, fraudulent solicitations in ZAM totaled $2,912,960, the Order finds.

To read the official Order from the CFTC click here.

Read Also: