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Why legal experts expect radio personality and registered rep Dawn Bennett to be barred from the industry for what started as an exaggeration of AUM

In the great tradition of legal quagmires, the cover-up seems as much the issue as the original broadcasted misdeed

Author Sanders Wommack September 18, 2015 at 7:55 PM
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Dawn Bennett accounted for AUM totals by saying she managed cash for a South African telecom, a Virginia-based travel agency, and Virginia-based historical preservation group

RIA Compliance


Women of Wealth Management

Bill Winterberg

Bill Winterberg

September 20, 2015 — 7:41 PM

You wrote:
“But realize that AUM is a factor that the SEC says very much matters as a representation of who you are and how competent you are in managing assets.”

I disagree with you, Brooke.

Nowhere that I’m aware of does the SEC imply that “AUM is a factor … [of] how competent you are in managing assets.”

The SEC does say, “You should not use the term “registered investment adviser” unless you are registered, and you should not use this term to imply that as a registered adviser, you have a level of professional competence, education or special training.”

If advisers can’t use the term “registered investment adviser” to imply competence, I feel it’s fair to say the SEC also prohibits advisers from touting AUM to imply competence.


Pete Giza

Pete Giza

September 21, 2015 — 2:25 PM

Which firm is more competent given $300MM AUM; a 5 person or a 20 person firm? Who is more competent; given two life-style RIAs, one with $50MM AUM or the one with $100MM AUM?

If AUM is a significant measure of competance then the public and the RIA industry as a whole is in trouble. It’s like judging a persons financial success by the car they drive.


Brooke Southall

Brooke Southall

September 21, 2015 — 4:33 PM


I think you are literally right.

But in my opinion the SEC is saying by its actions that the perception is the reality here. If you
inflate your AUM, people will presume you are more competent.

And I’m not sure the SEC would see things that way if there weren’t a grain or two of truth to it. With a few
Madoffian exceptions, you don’t get to $2 billion of AUM without doing some things right.

I think people should be willing to reveal their AUM. In the long run, Hiding it does more to perpetuate
false associations. The truth comes out, especially because it’s there in the ADV.


Bill Winterberg

Bill Winterberg

September 21, 2015 — 8:19 PM

Whether it’s imaginary AUM, imaginary portfolio managers, imaginary clients, imaginary worldwide business offices, imaginary graduate degrees, etc., the SEC says, “The investing public is entitled to a level of confidence that information they receive about brokerage and advisory services is accurate.

To me, the SEC’s position is very simple: don’t lie; for whatever reason; competence, prestige, expertise, it doesn’t matter. If you don’t have it, don’t flaunt it.

Ms. Bennett will soon find out what happens when you lie to investors.

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Top Executive: Patrick J. Burns, Jr., Esq.

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Top Executive: Patrick J. Burns, Jr., J.D.

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