Court Slaps Bigger Fine On Advisor Accused Of Repeated Fraud

Investment adviser Brandon E. Copeland and his advisory firm, E.B. & Copeland Capital, Inc. were recently ordered to pay a hefty fine for what the Securities and Exchange Commission is calling “recidivist” violations.

The United States District Court for the Northern District of Ohio sided with the SEC in ordering Copeland to pay an additional civil penalty of $192,768. The SEC instituted a settled order against Copeland in July 2019 for, among other things, making false and misleading statements to investors and barred him from the securities industry.

Copeland immediately violated the SEC’s order, the agency said in a complaint. Specifically, Copeland allegedly created, and associated with, Copeland Capital and failed to pay the ordered penalty of $25,000.

According to the complaint, Copeland and Copeland Capital committed a new fraud by promoting a new private fund on a public website that contained numerous material misstatements and omissions regarding the status and success of the fund, as well as Copeland’s industry experience and disciplinary history with the SEC.

The SEC filed a new complaint in March, with investigators unable to hide their ire.

“Copeland has blatantly disregarded an SEC order and continued to repeatedly lie to prospective investors by, among other things, claiming that he is an experienced investment adviser who has launched successful, sophisticated hedge funds,” the complaint read. “He is not.”

Copeland initially drew the SEC’s attention as a co-owner of Colorado-based investment advisers Salus, LP and S.A.I.C., Limited with Gregory M. Prusa. The paid were singled out for making materially false statements to prospective investors and in SEC filings.

According to the SEC’s order, from December 2017 through June 2019, Salus made numerous false statements in its Form ADV filings, claiming to have up to $178 million in assets under management and 20 high net worth individual clients. Further, according to the order, Salus promoted itself to prospective clients as an SEC-registered investment adviser.

The SEC determined that Salus never had any assets under management or any individual clients and was never eligible to register as an investment adviser with the SEC.

Additionally, the order found that the Salus hedge fund, whose general partner was SAIC, made material misrepresentations to prospective advisory clients, overstating the experience and expertise of SAIC and Copeland, and falsely claiming to have hired a specific accountant, legal counsel, prime broker, and custodian for the fund, when no such professionals had been hired.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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