The U.S. Securities and Exchange Commission (SEC) has charged Timothy Overturf of Arcata, California, and its investment advisory firm, Sisu Capital, LLC, with breaching their fiduciary obligations to clients, including their prolonged unauthorized and illegal transactions in client accounts.。

The SEC also accused Overturf's father, Hansueli "Hans" Overturf, of aiding and abetting violations by his son and Sisu Capital.。

The SEC's lawsuit alleges that Sisu Capital and Timothy Overturf repeatedly failed to live up to customer expectations.。First, the SEC's complaint alleges that from 2017 to 2021, Sisu Capital and Timothy Overturf allowed Hans Overturf to provide investment advice to Sisu Capital clients, while Hans had been suspended from providing investment advisory services by California.。

Second, the SEC complaint further alleges that Sisu Capital, Timothy and Hans traded against client instructions and for their own benefit by investing client funds in thinly traded bank stocks.。Sisu Capital and Timothy allegedly bought the stock as part of an undisclosed plan to amass enough shares between Sisu Capital's clients and themselves for Timothy to propose a business tie-up to the bank.。

Third, as alleged in the SEC complaint, from 2017 to 2021, Hans recommended and Timothy purchased an inappropriate, complex short-term use financial instrument on behalf of his clients, which Sisu Capital's clients subsequently held for several months.。

According to the SEC's complaint, Sisu Capital earned more than $2 million in consulting fees and other compensation in the course of these acts.。

The SEC filed suit in federal court in San Francisco alleging that Sisu Capital and Timothy Overturf violated the anti-fraud provisions of Sections 206 (1) and 206 (2) of the Investment Advisers Act of 1940 and that Hans Overturf aided and abetted his son's fraud, as well as violations by Sisu Capital.。The complaint seeks a permanent injunction, recovery of pre-judgment interest and civil penalties.。