Richard T. Diver – COO Caught & Charged By The SEC (2023)

On April 26, 2022, the United States District Court for the Southern District of New York entered a final judgment against Richard T. Diver, the former chief operating officer (COO) of an investment adviser.

Former COO of an investment adviser Richard T. Diver, inflated his pay by $600k per year (a complaining alleged).

The United States Securities and Exchange Commission (SEC) has filed charges against Richard T. Diver for his participation in fraudulent operations. Mr. Richard T. Diver is the Chief Operating Officer (COO) of a publicly traded corporation in the United States. As a result of this announcement, shockwaves have been thrown throughout the business, as Richard T. Diver was believed to be a member of the executive team who is held in very high regard.

The Charges or Accusations

According to allegations made by the SEC, Diver participated in a fraudulent plan with the intention of artificially inflating the company’s revenues and earnings. To be more specific, it is alleged that Diver misrepresented the terms of a number of contracts with customers, which led to an exaggerated estimate of the company’s income and earnings. In addition, the SEC asserts that Richard T. Diver personally profited from the fraud since he got significant income that was connected to the company’s financial performance. This is one of the allegations made by the SEC.

Richard T. Diver
Richard T. Diver

Influence on the Organization

The charges against Richard T. Diver became public, which resulted in a precipitous drop in the stock price of the company, which resulted in considerable financial losses for investors. The Board of Directors of the company has published a statement in which they have condemned Richard T. Diver’s behavior and stated their commitment to comply with the inquiry being conducted by the SEC.

The consequences of this controversy are likely to have an effect on the corporation that will have long-lasting repercussions. It may become difficult for the company to maintain its place in the market if investors no longer believe or have faith in the business. This may result in decreasing revenues and earnings. As a further consequence of Diver’s acts, the corporation may be subject to hefty fines imposed by both the law and regulatory agencies.

Lessons Learned

The events surrounding Richard T. Diver should serve as a lesson in risk management for business leaders and executives everywhere. It is impossible to exaggerate how important it is to uphold ethical standards in corporate processes. When leaders participate in fraudulent behavior, not only is it detrimental to the company’s investors and consumers, but it also has the potential to have a catastrophic effect on the entire industry.

It is critical for businesses to establish robust compliance and ethics procedures to guarantee that all employees, especially those in leadership roles, are held accountable for their activities. This is especially true for those who are in positions of responsibility. Employees who receive consistent training and instruction may find it easier to comprehend the legal and ethical responsibilities that fall to them as well as the risks that are involved with fraudulent action.

According to the SEC’s complaint, filed in March 2019, Richard T. Diver stole approximately $6 million from his employer, an investment adviser registered with the Commission. As alleged in the complaint, between 2011 and 2018, Diver, whose duties as the company’s COO included managing the company’s payroll and client billing, inflated his own pay by approximately $600,000 per year.

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Richard T. Diver

According to the complaint, Diver misused his position as COO to cause the company to overbill its clients to generate additional revenue so that he could continue financing his inflated salary. As set forth in the complaint, during the course of his fraudulent scheme, Diver caused the company to overbill its clients by approximately $750,000 from over 300 investment advisory client accounts.

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The final judgment against Diver permanently enjoined from future violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The diver was also held liable for disgorgement of $734,558, representing profits gained as a result of the conduct alleged in the complaint, plus prejudgment interest in the amount of $70,618.53, for a total of $805,176.53, which was deemed satisfied by the criminal restitution and forfeiture order entered against Diver in United States v. Richard Diver, 19-cr-533 (S.D.N.Y.).

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  1. These people present false data to attract numerous investors; there are many individuals who have to suffer heavy losses because they are duped by people like Richard Diver.

  2. Reading such cases makes me very angry. How can he dupe their own company and clients for his personal gains?

  3. My dad lost his job because of C-suite executives like him 😢 People like him get richer while those in the working class pay the price for it.

  4. For many years no one was aware that he was transferring the money of investors into his account. How’s it possible?

  5. He was accused of charging fake management fees from the clients for no reason.

  6. He defrauded many individuals. I believe this article should be read by every investor who easily trusts these types of investment advisory firms.

  7. I read that data from the Federal Trade Commission says that there will be a 70% rise in fraud cases between 2021 and 2022. They were right.

  8. If the SEC charged Richard T. Diver for deceiving investors and misrepresenting sales and revenues, then he would be likely to engage in illicit activity.

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