SEC v. Kronus Financial Corporation, Finser International Corporation, Andrew H. Jacobus — U.S. Securities and Exchange Commission Litigation Release No. 26317, dated May 29, 2025.
The SEC charged two investment advisory firms, Kronus Financial Corporation and Finser International Corporation, and their principal, Andrew H. Jacobus, with defrauding clients out of over $17 million. The defendants allegedly misrepresented investments, including IPO stocks and a specific fund, and misappropriated client funds for personal expenses like mortgages and luxury vehicles, while also making Ponzi-like payments to some investors.
In Plain English
Imagine you give your piggy bank money to a friend who promises to invest it in cool stuff like new company shares. Instead, your friend takes a big chunk of that money and buys a fancy car or pays their own bills, and then sends you fake reports saying your money is growing. That's similar to what happened here, where investment advisors took millions from clients, most of whom were older or from other countries, and used the money for themselves instead of investing it as promised.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Raising Funds Under False Pretenses Between May 2015 and April 2024, Andrew H. Jacobus, through Kronus Financial Corporation and Finser International Corporation, convinced 40 clients to invest approximately $39.7 million. Clients were led to believe their money would be invested in securities, including IPO stocks and the Corfiser SIMI Fund (later Kronus High Yield Fund).
- Misrepresenting Investment Vehicles Jacobus offered and sold limited partnership interests in the Corfiser SIMI Fund. He misrepresented to clients that their funds would be invested in this specific fund, which purportedly invested in IPOs, thereby creating a false sense of security and opportunity.
- Fabricating Account Statements To maintain the illusion of legitimate investments, Jacobus allegedly sent periodic account statements to clients. These statements contained fictitious holdings and balances, misleading investors about the true status and performance of their portfolios.
- Misappropriating Client Funds Despite assurances that client funds would be invested, the defendants allegedly misappropriated over $17.3 million. This money was diverted for personal use, including Jacobus's mortgage payments, property taxes, real estate purchases, travel, and luxury vehicles.
- Making Ponzi-like Payments In addition to direct misappropriation, Jacobus allegedly used new investor funds to make approximately $7.8 million in Ponzi-like payments to certain existing advisory clients. This created a false impression of returns and solvency.
- Hiding the Truth from Clients Jacobus misled clients about the legitimacy and returns of their investments, as well as their access to funds. The fabricated account statements and diversion of funds were central to concealing the fraudulent nature of the scheme.
The Enforcement Action
On May 28, 2025, the SEC filed a complaint in the U.S. District Court for the Southern District of Florida against Kronus Financial Corporation, Finser International Corporation, and Andrew H. Jacobus. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties. The SEC also seeks a conduct-based injunction against Jacobus. The investigation was conducted by the SEC’s Miami Regional Office.
Named in this action: Kronus Financial Corporation, Finser International Corporation, Andrew H. Jacobus.