Red County CEO in hot water with Securities and Exchange Commission

The SEC has filed suit against Red County CEO and repuglican blogger Chip Hanlon.  Among the many allegations in the suit is that Hanlon committed fraud and misrepresentation for his part in Delta Global Advisors' fraudulent SEC filings and website promotion. 

The Orange County Register's Jonathan Lansner posted the story via the Register's blog, Lansner on Real Estate- an odd place to post such a story.

It isn't much of a surprise for those in "the circle" although there are a lot of OC Republican investors who will be asking for a return on their investment. 

Lansner had this to say (from the OC Register):

In legal paperwork it released Thursday afternoon, the SEC charged Hanlon with, improperly filing as a registered investment advisor. The SEC wrote:

“From March 7, 2007 through July 6, 2008, Delta’s Form ADV filings improperly included the trusts’ assets as Delta’s advisory assets under management, even though Delta did not provide continuous and regular supervision of the trusts’ assets.”

… and …

“In four filings, Delta claimed to manage between $656 million and $1.49 billion, when in reality Delta’s assets under management dropped as low as $9 million during this period. For nearly every period reflected in Delta’s (financial advisor) filings, Delta did not have $25 million or more in advisory assets under management and therefore was not eligible for Commission registration.”

The SEC also charged that Hanlon did not disclose the shaky state of Delta Global, writing …

“Delta’s financial condition was seriously impaired in 2009 and 2010 because the firm had minimal liquid assets, overdue bills, and an unsatisfied court judgment in a breach of fiduciary duty lawsuit filed by one of Delta’s clients that ordered Delta and Hanlon to pay $353,706 in damages. Delta and Hanlon did not disclose Delta’s precarious financial condition to clients as required, nor did they disclose the court judgment or the fact that (broker regulator) FINRA had suspended Hanlon from acting in any registered capacity for failing to comply with arbitration award.”

SEC claims Hanlon used Delta’s website to also mislead the public, stating:

“Delta similarly misrepresented its assets under management through its website. Delta’s website included a section containing articles from Bloomberg, Reuters, and other news sources quoting Delta’s employees, including Hanlon. Many of these articles falsely stated that Delta had assets under management of $1 billion or more.”

No word yet if Hanlon plans to share a room with either convicted felons Bernie Madoff or Mike Carona.