Dow Rockwell LLC and Richard Dow Rockwell
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26185 / December 3, 2024
Securities and Exchange Commission v. Dow Rockwell LLC and Richard Dow Rockwell, 3:22-cv-02069 (N.D. Cal. filed Mar. 31, 2022)
SEC Obtains Final Judgments Against California Investment Adviser and its Owner for Undisclosed Conflicts of Interest Related to Real Estate Ponzi Scheme
On November 25, 2024, the U.S. District Court for the Northern District of California entered final consent judgments against Dow Rockwell LLC, a formerly California-registered investment adviser, and its sole proprietor, Richard Dow Rockwell. The entry of the consent judgments resolves all claims arising out of the SEC’s March 31, 2022 complaint, which alleged that Rockwell and Dow Rockwell LLC failed to disclose compensation they received in connection with soliciting and recommending investments in the securities of Professional Financial Investors, Inc. (“PFI”), a Marin County, California real estate investment and management company that defrauded investors. As alleged, PFI operated as a Ponzi scheme, where a substantial portion of investor funds was used to pay back previous investors, and more than $35 million in investor funds was misappropriated by PFI’s executives. The complaint also alleged that Rockwell and Dow Rockwell LLC did not disclose the past criminal conviction of PFI’s founder to their clients and that, during the time Rockwell and Dow Rockwell LLC offered and sold PFI securities, neither was registered as a broker-dealer with the SEC or associated with a registered broker-dealer.
Without admitting or denying the allegations in the SEC’s complaint, Rockwell and Dow Rockwell LLC consented to the entry of final judgments that permanently enjoin them from future violations of Sections 206(1), 206(2), and 207 of the Investment Advisers Act of 1940; Sections 5(a) and 5(c) of the Securities Act of 1933; and Section 15(a)(1) of the Securities Exchange Act of 1934. The final judgments further order Rockwell and Dow Rockwell LLC to pay, on a joint-and-several basis, disgorgement in the amount of $402,075 plus prejudgment interest thereon in the amount of $121,843.85, and a civil penalty of $80,000.
The SEC’s litigation was conducted by Brent Smyth of the San Francisco Regional Office.