Following a separate enforcement action in 2022 for similar facts, the SEC again charged registered investment adviser, A.G. Morgan Financial Advisors, LLC, owner Vincent Carmada, and principal James McArthur, with fraudulently inducing advisory clients, many of whom were elderly and financially unsophisticated, to purchase securities in the form of promissory notes issued by five high-risk private equity funds that Camarda and McArthur created, managed, and owned.  Defendants allegedly told investors that the investments were conservative and safe and that the funds would invest in several diverse areas, while in reality, four of the funds invested entirely in a high-risk mining venture and the fifth invested entirely in a start-up coffee shop company operated by Camarda’s son. The complaint further alleges that Defendants failed to disclose their substantial conflicts of interest in recommending the funds to their clients, including payments received in connection with the funds’ investments in the mining venture and that one of the funds was created for the sole purpose of funding Camarda’s son’s coffee shop company.  In addition, Camarda is alleged to have misappropriated approximately $1 million of client money by transferring it to his personal bank account. This case involved multiple red flags that elevate enforcement risks, including a recidivist bad actor, sale of private vehicles to retail investors, and the use of promissory note schemes. Moreover, the SEC continues to look for instances of self-dealing and continues to police undisclosed conflicts, particularly when these red flags exist.