Westport investment advisor pays $150K in AML penalty

WASHINGTON, D.C. — A Westport- and Manhattan-based investment advisor has agreed to pay a $150,000 penalty related to violating federal anti-money laundering (AML) procedures, according to the Securities and Exchange Commission.

Navy Capital Green Management LLC, with offices on Weichert Circle in Westport, was charged by the SEC with not following AML Act of 2020, which is aimed at strengthening the U.S. financial system’s defenses against money laundering and terrorist activities. The SEC order finds that Navy Capital did not, in fact, always conduct AML due diligence, including with respect to an entity owned by an individual publicly reported to have suspected connections to money laundering activities. As noted in the order, a foreign court eventually froze the assets of one of Navy Capital’s private funds because it held funds from that investor.

The order finds that, from at least October 2018 until January 2022, Navy Capital stated in offering and other documents provided to prospective and existing private fund investors that the firm was voluntarily complying with AML due diligence laws despite those laws not applying to investment advisers, including by conducting specific types of AML due diligence on prospective investors and conducting ongoing AML due diligence monitoring on existing investors.

According to the order, Navy Capital’s private fund investors included multiple foreign-based entities with opaque beneficial ownership and sources of wealth.

The SEC’s order further finds that Navy Capital failed to adopt and implement written policies and procedures reasonably designed to ensure the accuracy of offering and other documents provided to prospective and existing investors.

“This case reinforces the fundamental duty of investment advisers to say what they do and do what they say,” said Tejal D. Shah, associate regional director of the SEC’s New York Regional Office. “Here, Navy Capital failed to follow the AML due diligence procedures that it said it would, thus misleading investors about the level of risk they were undertaking.”

The commission’s order finds that Navy Capital willfully violated the Investment Advisers Act of 1940 and related rules. Without admitting or denying the findings, the company agreed to cease and desist from violations of the charged provisions, be censured, and pay the civil penalty.

Navy Capital Green Management had $153.9 million in assets under management as of March 2023 and had seven employees.

No one from Navy Capital could be reached for comment. Also, its website is no longer operating.