U.S. authorities brought charges against a New York-based brokerage firm, and its founder, today alleging that they violated the capital rules for brokers and then falsified its books to hide those deficiencies.
The U.S. Securities and Exchange Commission (SEC) announced that it has charged Crucible Capital Group Inc. and the firm’s founder, Chuck Moore, for allegedly attempting to disguise the firm’s capital deficiencies by off-loading its liabilities onto an affiliated firm, among other things. The commission says that its examiners were also provided with doctored invoices designed to mask the extent of the firm’s liabilities.
Moore was also charged criminally by the U.S. attorney for the Southern District of New York, Preet Bharara. His office announced that Moore was arrested this morning and charged with obstructing a regulatory examination and making false statements and false filings.
The allegations have not been proven in either case, and Moore is presumed innocent of the criminal charges.
“The SEC is entitled to the truth when it examines the books and records of institutions as it seeks to protect investors and our markets. Broker-dealers, from large institutions to boutique firms, have a duty to make accurate financial reports,” said Bharara. “As the charges set forth, Charles Moore attempted to blow smoke in the eyes of the SEC, which was also an attempt to deceive his clients, and such charges come with appropriately hefty maximum sentences.”
The obstruction and falsifying records counts each carry a maximum sentence of 20 years in prison. The false statement charge carries a maximum sentence of five years in prison.