SEC Charges California Resident and His Investment Firm for Undisclosed Conflicts of Interest

INVESTORS: The SEC charged Richard Dow Rockwell and his investment firm for their roles in selling securities that defrauded investors.

The SEC charged Richard Dow Rockwell and his California-registered investment firm Dow Rockwell LLC for their roles in selling securities in Professional Financial Investors, Inc., (“PFI”) a real estate investment and management company that defrauded investors.

The SEC alleged that from 2017 until 2020, Rockwell and his company raised approximately $8 million for PFI by selling its securities to their advisory clients. Rockwell and Dow Rockwell earned approximately $400,000 in referral fees from PFI for soliciting and recommending its products to their clients. However, the clients were not advised of this conflict of interest. Additionally, Rockwell and Dow Rockwell failed to disclose the past criminal conviction of PFI’s founder to their clients. The SEC also alleged that neither Rockwell nor Dow Rockwell were registered as a broker-dealer with the SEC or associated with another broker-dealer when they offered and sold PFI securities.

The SEC alleged that Rockwell and Dow Rockwell, LLC violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934 and Sections 206(1), 206(2) and 207 of the Investment Advisers Act of 1940. The complaint seeks an order permanently enjoining Rockwell and Dow Rockwell LLC from violating the charged provisions, and requiring them to pay civil penalties and disgorgement of ill-gotten gains with prejudgment interest.

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