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Andrew Bryan Holmes

Andrew Holmes’s Answers

3 total

  • Do I need to have clients sign a waiver freeing me of liability? Do I need to make disclaimers on my website?

    I am providing personal financial advice like how to manage debt, how to create a budget, etc. (no specific investment advice). I do this over the phone and in person, and receive flat fee payment. I assume I do not need a license such as a seri...

    Andrew’s Answer

    If you give no specific advice as to how/where/what to invest, and you take a flat fee for your general advisory services (as opposed to transaction-based or performance-based compensation), you may not need to register.

    That said, you need to be very careful about what you do and don't do, as it can have severe consequences. In CA: “'Investment adviser' means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for the compensation and as part of a regular business, publishes analyses or reports concerning securities ..." Corporations Code § 25009(a). Similarly, “'Broker-dealer' means any person engaged in the business of effecting transactions in securities in this state for the account of others or for his own account." Corporations Code § 25004(a).

    If you are found to have been acting as either an unregisterd Investment Adviser or Broker, an aggrieved party may bring an action for treble their damages, plus attorney's fees and costs. Code of Civil Procedure § 1029.8(a).

    So don't mess around - go to a securities compliance lawyer to make you understand what you can and can't do without registering, and to be clear on what your disclosure obligations are.

    Good luck!

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  • What happens if I miss court from the U.S. SEC and leave the country?

    7 years ago, I was served a subpoena from the U.S. Securities and Exchange Commission stating that there have been complaints made about me regarding securities fraud. I never went to the court date to testify or produce the documents required of ...

    Andrew’s Answer

    I would need a little more clarity in order to give you a clear answer to your question.

    My guess is that since you wrote "subpoena," this is an SEC-issued investigative subpoena. This type of subpoena is not issued by a court, and as such is not self-enforcing. That means that if you failed to respond, the SEC would have to file a subpoena enforcement action in district court in order to obtain an order requiring you to respond. It is unclear from your question if that is what happened for you, but my guess is this was an investigative subpoena. If the SEC filed a civil case against you (even if only for a subpoena enforcement action), there should be a record of it in the federal court system in either the district you were then in, or else in the district where the investigating SEC office is in (there could be other districts, too, but those are the most likely).

    Also, the SEC is civil only, so any criminal investigation would be separate and apart from the SEC's interest. If the case was referred to the US attorney, then it is possible that a criminal case was brought under seal, and they're just waiting for you to show up in customs. But without knowing more about your case, that's impossible to predict.

    Finally, the statute of limitations on these things is tricky. If you actually fled the country rather than face pending charges, then the entire time you are out of the country can be excluded from the statute of limitations. Moreover, for SEC civil cases, the SEC takes the position that there is no statute of limitations on their ability to seek injunctive relief and disgorgement of any ill-gotten gains. There is a 5-year statute of limitations on penalties, though.

    All or none of the above may apply to you. Given the concerns you've articulated, and especially if you plan to return to the U.S., I'd recommend retaining someone with both SEC and white collar defense experience.

    Good luck!


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  • How long am I liable to "clawback" money I have received from a Ponzi scam

    ATM scam in place for 19 years I'm an investor most yrs for 1 or 2machines until recently

    Andrew’s Answer

    Based on the timing of this question, I assume you are an investor in the Nationwide Automated Systems case recently brought by the SEC. The receiver will do his/her best to find all of the assets he/she can in order to return investor funds to those who lost their investments -- and the "clawback" is a way of (essentially) equitably redistributing those funds.

    While there are many theories available for a receiver to use as a basis for a clawback, the two more common legal theories are found in the Bankruptcy Code (which has a 2 year SOL for fraudulent conveyances), and state law claims (which vary by state, but in California, the SOL is as long as six years under certain circumstances).

    You should consult with an SEC defense specialist to determine your exposure.

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