I’ve said it before: Don’t overstate assets under management. You need to keep records on your calculations and be able to prove the calculations.
Umesh Tandon ran Simran Capital Management and was trying to land California Public Employees’ Retirement System (CalPERS) as a client. The problem was that CalPERS required prospective investment advisers to have at least $200 million in assets under management.
According to the SEC Order, Tandon lied and stated that his firm met that test. In reality, the firm had only $80 million in assets under management. The Firm’s Form ADV stated that the firm had $102 million in assets under management.
Once that line was crossed, the firm used overinflated statements of assets under management when pitching other clients.
Then the SEC examiners showed up and popped the bubble. Now Tandon is barred from the securities industry and has to pay a substantial fine.