The allegations read: Sec release 34-89021; ia release 40-5516, june 5, 2020: the securities and exchange commission ("commission") deems it appropriate an in the public interest that administrative proceedings be, and hereby are, instituted pursuant to section 15(b) of the securities exchange act of 1934 ("exchange act") and section 203(f) of the investment advisers act of 1940 ("advisers act"), against tamara steele ("steele" or "respondent").
the commission finds that steele is the sole owner of steele financial, inc. ("steele financial"), an investment adviser formerly registered with the state of indiana and the commission, and serves as its president, chief compliance officer, chief financial officer, chief operating officer, and director. At all relevant times, steele was an "investment adviser" within the meaning of section 202(a)(11) of the advisers act because she was in the business of providing investment advice to clients about securities in exchange for compensation. Steele also owned, managed, and controlled steele financial. From january 2009 until june 2017, steele was also associated as a registered representative with a broker-dealer registered with the commission.
on may 20, 2020, a final judgment was entered by consent against steele, permanently enjoining her from future violations of sections 206(1), (2), and (3) of the advisers act; section 17(a) of the securities act of 1933; sections 10(b) and 15(a) of the exchange act and rule 10b-5 thereunder, in the civil action entitled securities and exchange commission v. Tamara steele, et al., civil action no. 18-cv2838, in the united states district court for the southern district of indiana.
the commission's complaint against steele, the allegations of which steele neither admits nor denies, alleged that from approximately december 2012 through october 2016, steele fraudulently recommended and sold to her advisory clients over $13 million in extremely risky securities issued by a private company, behavioral recognition systems, inc. ("brs"). The complaint also alleged that in violation of her fiduciary duties of loyalty and good faith, steele failed to disclose to her clients that brs had agreed to pay her commissions ranging from 8% to 18% of the funds raised for brs. The complaint also alleged that steele acted as a broker for brs securities without registering with the commission as such and illegally received hundreds of thousands of dollars in commissions for investments in brs that she solicited from both advisory clients and other investors.
the commission's complaint further alleged that, as part of the fraudulent scheme, steele concealed her sales efforts on behalf of brs from her own clients and from the broker-dealer with which steele was associated at the time. The complaint also alleged that steele (a) submitted false documents - including letters, invoices, and consulting agreements - to brs claiming that her husband had provided the services, instead of her; (b) falsely attested to the broker-dealer that she had not engaged in any securities transactions "away from the firm"; and (c) secretly purchased brs securities from a client using a nominee entity.
