Benjamin Quilty Subject of SEC Complaint

Benjamin Quilty (CRD #: 5391743), a broker registered with Pinnacle Investments, is named in a pending SEC complaint, according to his BrokerCheck record, accessed on July 6, 2023. Keep reading if you have questions about his alleged conduct as a broker.

SEC Civil Complaint

On May 5, 2023, the Securities and Exchange Commission filed a civil complaint against Benjamin Quilty, Pinnacle Advisors, and several other defendants alleging their involvement in the failure of an open-end investment company (the “NYSA Fund”) to comply with Rules 22e-4 (the “Liquidity Rule”) and 30b1-10 under the Investment Company Act of 1940.

The SEC alleged that, from June 2019 to June 2020, more than 15% of the NYSA Fund’s net assets were invested in the restricted shares of a medical device company. The fund allegedly failed to reduce its position in these shares to be under the SEC’s required 15% threshold or to comply with the relevant reporting and filing requirements.

Pinnacle Advisors and its principals, including Benjamin Quilty, were allegedly primarily responsible for monitoring the liquidity of the NYSA Fund’s investments, classifying their liquidity in accordance with the Liquidity Rule, and making required reports to the fund’s board of trustees and filings with the SEC.

Pinnacle Advisors and Benjamin Quilty allegedly aided and abetted the NYSA Fund’s violations by failing to classify the restricted shares of the medical device company as an illiquid investment, despite the underlying restrictions, transfer limitations, and lack of any market for the shares that required that classification.

These defendants allegedly also disregarded the advice of the NYSA Fund’s counsel, who allegedly resigned over these issues, and the advice of the fund’s auditors.

Further, the SEC alleged that these defendants made false and misleading statements and omissions concerning their improper classification to the SEC’s Division of Investment Management. They allegedly also aided and abetted the NYSA Fund’s violations by failing to have the fund submit required reports to the fund’s board of trustees and the SEC in a timely manner.

The NYSA Fund allegedly deregistered with the SEC on September 9, 2020, and transferred its assets to a liquidating trust. However, the shares involved in this complaint have allegedly not been sold, meaning that more than 2 ½ years after its deregistration, the NYSA Fund has yet to make a distribution to investors relating to these shares.

The SEC alleged that Benjamin Quilty aided and abetted the NYSA Fund’s violations of Rules 22e-4(b)(1) and 30b1-10 of the Investment Company Act. This civil complaint is currently pending.

Investment Company Act of 1940

Section 22e-4(b)(1) of the Investment Company Act describes the elements required for liquidity risk management programs of investment funds, including exchange-traded funds.

Section 30b1-10 requires all registered open-end and closed-end management investment companies (excluding money market funds) to file Form N-RN reports with the SEC, which describe the liquidity of these companies’ investments.

Background Information

Benjamin Quilty has passed the following exams:

• Series 66 – Uniform Combined State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 7 – General Securities Representative Examination
• Series 4 – Registered Options Principal Examination
• Series 53 – Municipal Securities Principal Examination
• Series 24 – General Securities Principal Examination

Benjamin Quilty is a registered broker in 18 states and a registered investment adviser in ten states.

He previously worked for Citigroup Global Markets (CRD#:7059).

Kurta Law Can Help

If you worked with Benjamin Quilty and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.