Background
The SEC initiated separate actions against two chief compliance officers for improprieties related to record creation and production to the SEC during examinations of their respective firms.
- Ballek Case (Release IA-6896)
- Moors Case (Release IA-6894)
Both cases primarily involve falsifying or creating backdated records requested by the SEC during routine examinations.
Key Takeaways
The SEC alleged that Suzanne Ballek, the Chief Compliance Officer of an unnamed and now defunct adviser, was asked to produce documents showing that employees had submitted trading approval forms before executing trades during an SEC examination in 2022–23.
Instead, she altered approximately 170 compliance forms, changing dates and filling in missing information to make it appear that approval had come before each trade. She even created entirely fake forms, adding signatures without employee consent.
These actions misled SEC examiners and breached formal written policies designed to ensure ethical trading and record integrity.
As part of the settlement, Ballek agreed to:
- Cease and desist from further violations;
- Serve a 3-year ban on performing compliance roles at any investment adviser or related entity;
- Pay a $40,000 civil penalty.
Moors Case
On July 15, 2025, the SEC issued an administrative order against Holbrook, New York-based adviser American Portfolios Advisors, Inc. (“APA”), APA’s former president, Gary Gordon, and APA’s former chief compliance officer, Colin Moors. The SEC found that Moors and Gordon backdated compliance documents and passed these to the SEC during a compliance review, misleading regulators.
As part of the separate settlements, APA agreed to pay a $1.75 million fine. Moors was personally ordered to pay $10,000.
Why it matters
- Document tampering is serious: Altering or backdating compliance records during a review significantly escalates enforcement risk and penalties.
- Targeted professional conduct: By naming individuals in separate proceedings, the SEC is signaling that misconduct linked to advisory firms, including private equity firms, may lead to personal penalties—such as suspensions, fines, or industry bans.
- Small errors carry weight: The $10,000 penalty and public censure may seem modest, but they carry reputational impact and career limitations.
- Administrative route: The SEC chose administrative actions (rather than court cases), reflecting its willingness to pursue enforcement swiftly and internally—without lengthy litigation.
Lessons for Private Equity Fund Managers
- Pre-emptive review helps
Conduct periodic internal audits to catch recordkeeping issues before they arise in a formal examination.
- Maintain clear, complete records
Ensure all compliance documents are current, accurate, and stored in readily accessible systems.
- Strengthen internal controls and documentation
Periodic review, whether internal or by a third party, often reveals minor gaps in internal policies or written procedures that develop over time. Well-documented protocols and logs can help advisers demonstrate robust stewardship if questioned.
- Educate employees on compliance obligations
Both the Ballek and Moors cases underscore the need for regular, documented training—especially when rules and SEC expectations evolve. All employees should be aware of the recordkeeping requirements and the importance of adherence.
How Can Trillium Help
Testing and Surveillance: A key component of Trillium’s ongoing compliance support is reviewing your firm’s practices in key risk areas against policies and procedures and disclosures. The ability to identify and rectify problematic areas prior to an examination is integral in preventing potentially significant time and expense later on.
Trillium’s Compliance Health Check helps identify gaps in internal processes and procedures and provides a fresh perspective on your compliance program, independent of the day-to-day, week-to-week, and month-to-month operators.