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Scott Trease: Sapere Wealth Advisor Settles SEC Fraud Charges
The Securities and Exchange Commission recently announced settled charges against Matthews, North Carolina financial advisor Scott Trease (CRD# 1298222) and his advisory firm Sapere Wealth Management. Records maintained by the Securities and Exchange Commission show that the charges stem from an investigation launched in April 2022.
According to a press release issued by the SEC on March 3rd, 2023, the charges against Mr. Trease and Sapere Wealth Management relate to allegations that he unsuitably recommended “that three clients invest $7.3 million in risky, alternative-investment deals.” The SEC alleged that in July 2017, he became friends with a “self-described financier,” who between 2018 and 2019 “helped identify” a number of alternative investment products for Mr. Trease and his firm. “The opportunities,” the SEC states, “consistently fell apart and, according to the SEC, raised several red flags indicating that these types of alternative investments were unsuitable for Sapere’s and Trease’s clients.” He and Trease allegedly recommended that three of his firm’s clients make an investment of $7.3 million “in two such alternative investments that Sapere and Trease incorrectly believed were collateralized by gold.” He and his firm allegedly lacked a reasonable understanding of the investments and had no reasonable basis on which to recommend customers invest in them. One client lost a sum of $2.3 million in one of these investments, according to the SEC, while another of the investment left “$5 million in client money… at risk, though the defendants and the self-described financier ultimately secured the funds’ return.”
The SEC ultimately charged Mr. Trease and Sapere Wealth Management with violation of the Investment Advisers Act of 1940. The parties were enjoined from future such violations and were required to “engage due-diligence consultants to review certain potential future transactions.” Mr. Trease was also ordered to pay a civil penalty of $100,000.
According to the Securities and Exchange Commission, Mr. Trease holds 20 years of securities industry experience. Based in Matthews, North Carolina, he has been an investment advisor with Sapere Wealth Management since 2002. He has no prior registrations. He is currently licensed as an investment advisor with the state of North Carolina. (Information current as of April 8, 2023.)
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