In March 2025, the U.S. Securities and Exchange Commission (SEC) initiated administrative proceedings against Momentum Advisors LLC, its former managing partner Allan J. Boomer, and former chief operating officer Tiffany L. Hawkins, alleging breaches of fiduciary duties and misuse of client and fund assets.
Momentum Advisors LLC and Allan J. Boomer:
- Misuse of Funds: Boomer, as a partner of Momentum Advisors and a member of the fund’s general partner, Franklin Morgan Partners, was found to have caused the fund to pay a business debt amounting to $346,904. This debt should have been settled by an entity controlled by both Boomer and Hawkins, resulting in an improper benefit to that entity.
- Inadequate Compliance Measures: The SEC determined that Momentum Advisors failed to implement sufficient compliance policies and procedures and did not conduct the required annual audits of the fund, as mandated by the Advisers Act’s custody rule.
Tiffany L. Hawkins:
- Misappropriation of Funds: Hawkins was found to have misappropriated approximately $223,000 from the portfolio companies between August 2021 and February 2024. She used company debit cards for personal expenses, including vacations and clothing.
- Undisclosed Compensation: From November 2022 through February 2024, Hawkins received compensation from the fund without proper disclosure to investors, breaching her fiduciary duty.
Synthesis of the Proceedings:
Both Boomer and Hawkins, in their respective roles at Momentum Advisors and the fund, engaged in actions that prioritized personal interests over their fiduciary responsibilities to investors. Boomer’s failure to oversee fund expenditures and his involvement in the improper payment of business debts highlight lapses in governance and compliance. Hawkins’ direct misappropriation of funds and receipt of undisclosed compensation further underscore the disregard for fiduciary duties. Collectively, these actions led to financial harm for investors and a breach of the trust placed in them by clients and stakeholders.
Penalties
The SEC imposed the following penalties and sanctions due to breaches of fiduciary duties, misuse of client and fund assets, inadequate compliance policies, and failure to conduct required audits, all of which harmed investors and violated the Investment Advisers Act of 1940.:
Tiffany L. Hawkins:
- $200,000 Civil Penalty: Hawkins agreed to pay a civil penalty of $200,000.
- Associational Bar: She is barred from associating with any investment adviser, effectively prohibiting her from working in the securities industry.
Allan J. Boomer:
- $80,000 Civil Penalty: Boomer agreed to pay a civil penalty of $80,000.
- 12-Month Supervisory Suspension: He faces a 12-month suspension from supervisory roles within the investment advisory industry, limiting his ability to oversee investment advisory activities.
Momentum Advisors LLC:
- Censure: The firm received a censure, indicating formal reprimand for its misconduct.
- $235,000 Civil Penalty: Momentum Advisors agreed to pay a civil penalty of $235,000.
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 provides a fresh perspective on your compliance program from someone not involved in the day-to-day, week-to-week, and month-to-month operations.