A small New York-based registered investment advisor overstated its assets under management by trillions—with a "T"—according to new charges from the Securities and Exchange Commission.
The commission charged Vista Financial Advisors and co-owner, CEO and CCO Ruben Cedrick Williams in New York federal court this week with repeatedly “making material misrepresentations” on Form ADV filings that drastically ballooned the firm’s managed assets.
The firm registered with the commission in December 2021 and submitted a Form ADV filing in April 2022, listing the principal office in Bronx, N.Y. and its AUM as $10 billion in total, held in a single non-discretionary account.
In June, SEC examiners started looking into the firm as a part of their standard process with new RIAs. When examiners arrived, Williams reportedly told them AUM had grown to more than $180 billion in the interim, with a Swedish trust and its customers the firm’s only client.
Vista initially cooperated, but quickly stopped communicating with the SEC exams team. By September, examiners informed Vista that, among other things, it wasn’t likely eligible for SEC representation, as it was deemed to manage less than $25 million and didn’t seem to hit the AUM threshold.
Vista responded it was “transferring certain client assets to new custodians,” and that it would offer up bank and brokerage statements showing its AUM after this was completed. (Examiners never heard back from Vista, according to the order.)
The commission responded with investigative subpoenas last February, seeking testimony and documents about Vista’s managed assets, clients and ownership structure. Williams said he was trying to attain counsel, and the commission agreed to a number of adjournments and set a deadline of May 18; Vista and Williams never showed up.
In April, as this was unfolding, Vista allegedly filed an updated Form ADV, with a new address in Manhattan, 32 clients listed, and an AUM of almost $11.5 trillion.
“Vista did not manage assets remotely approaching the $10 billion in RAUM stated in the 2022 Form ADV. Similarly, Vista did not have assets under management remotely approaching the $11.5 trillion in RAUM represented in the 2023 Form ADV,” the complaint read. “In fact, Vista has failed to produce documents evidencing any legitimate assets under management.”
Among other oddities, Vista provided a spreadsheet to the SEC exams team listing its client assets included a bank account with a balance of more than 140 billion euros; the bank records show the account never had more than $3,500, according to the SEC.
The spreadsheet also included debt instruments, including $42 billion in U.S. Treasury Bonds and six medium-term notes with market values over $3 billion; according to the SEC, there was no evidence the firm ever managed any Treasury Bonds.
Vista's representatives did not return a call seeking comment.
The commission is seeking permanent injunctive relief and civil penalties in the complaint.