On September 23, 2019, the Commission instituted and simultaneously settled an administrative and cease-and-desist proceeding by issuing an Order against HCR Wealth Advisors (“HCR”). In the Order, the Commission found that the Respondent failed to reasonably supervise Jeremy Joseph Drake (“Drake”), formerly an investment adviser representative of HCR, and failed to implement reasonable compliance-related policies and procedures in response to red flags about Drake’s handling of client accounts. The Commission ordered, and the Respondent has paid, a civil money penalty in the amount of $220,000 to the Commission. See the Commission’s Order.

On December 2, 2021 the Commission issued an Order establishing a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the civil money penalty paid by Respondent can be distributed to the remaining investor victim. See the Commission’s Order.

On August 31, 2022, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-95641.

On July 17, 2023, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-97921 and the Proposed Plan.

The Proposed Plan provides that the distribution of the Fair Fund shall be made to the one remaining harmed investor who suffered a loss due to the Respondent’s conduct described in the Order, as calculated by the methodology used in the plan of allocation in the Proposed Plan.

On September 15, 2023, the Commission issued an order approving the Proposed Plan and simultaneously posted the approved plan of distribution (the “Plan”). See the Commission’s Order: Release No. 34-98408 and the approved Plan.

On November 14, 2023, the Commission issued an order approving the disbursement of $148,018.05 from the Fair Fund for distribution by the Fund Administrator in accordance with the Plan. See the Commission’s Order: Release No. 34-98939

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov