The allegations read: The securities and exchange commission (the "commission"), for its complaint against defendants sisu capital, llc ("sisu"), timothy overturf and hansueli overturf ("hans overturf") alleges that sisu and timothy overturf (sisu's owner and chief executive officer), breached their fiduciary duties as investment advisers, including by making unauthorized and unsuitable trades on behalf of, and making material misrepresentations to, their clients. Among other things, sisu and timothy overturf allowed timothy overturf's father, hans overturf, to give investment advice to sisu's clients, even though he was suspended by the state of california from acting as an investment adviser. While hans overturf was serving his first suspension by the state of california, timothy overturf founded sisu. Timothy overturf was eighteen years old at the time. Sisu purported to offer investment advisory and portfolio management services to high net worth clients. Hans overturf turned over many of his personal investment advisory clients to his son's new company, sisu. Sisu and timothy overturf breached their fiduciary duties by engaging in unauthorized and unsuitable trading on behalf of sisu's investment advisory clients by making investments in sisu client discretionary accounts contrary to clients' instructions, and by making unsuitable investments on behalf of sisu clients. Similarly, hans overturf also made unauthorized trades and recommended unsuitable investments for sisu's clients, including during one of the periods he was subject to a suspension from employment in the investment advisory industry by the state of california. Sisu, timothy overturf, and hans overturf failed to disclose this suspension and hans overturf's disciplinary history to sisu's clients. Timothy overturf was aware of his father's unauthorized trading activity in sisu client accounts and unsuitable investment recommendations for sisu clients, but nevertheless allowed hans overturf to use his limited power of attorney to trade in some sisu client accounts, which generated advisory fees for sisu. Sisu withdrew over $2 million in portfolio management fees, performance-based fees, and commissions from sisu clients' accounts, including fees generated by unsuitable investment recommendations and by trades initiated by sisu, timothy overturf and hans overturf that were on behalf of clients but contrary to client instructions. Timothy overturf also personally received hundreds of thousands of dollars in owner draws and loans from sisu. As a result of his conduct, timothy overturf directly or indirectly violated, and unless restrained and enjoined will continue to violate, sections 206(1) and 206(2) of the advisers act.
