Mark J. Correnti

In June, the SEC charged Capital Works Investments Partners, a San Diego-based investment advisor, and its director of client services and marketing, Mark Correnti, with not correcting problems turned up in a 2002 exam.It also charged them with lying to clients about there being any problems.Correnti was also listed as the head of compliance.

The regulator specifically targeted Correnti for not adopting written compliance procedures until several months after the deadline.

In that case, the SEC sanctioned CapitalWorks Investment Partners, LLC, a registered investment adviser, and Mark J. Correnti, a principal of the firm and its director of client service and marketing, for (i) making false and misleading representations to existing and prospective clients in responses to requests for proposals (RFPs) and other documents and (ii) failing to have written compliance policies and procedures in place relating to client communications.According to the order, in mid-2002, the SEC's examination staff conducted an inspection of CapitalWorks and issued a deficiency letter which identified various problems that needed to be corrected.In its order, the SEC alleged that from August 2002 to December 2004, CapitalWorks and Correnti misrepresented facts to existing and prospective clients about the results of that inspection.It found, for example, that in 10 responses to RFPs, CapitalWorks falsely stated that "[t]he SEC did not find any deficiencies and required no follow-up actions" or that "[n]o violations were found" in connection with the inspection.The SEC also stated that, even though investment advisers were required to adopt written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act and its rules by October 2004, CapitalWorks had not adopted procedures that would address inaccurate responses to RFPs until April 2005.The SEC found that CapitalWorks violated the antifraud provisions of Sections 206(2) and 206(4) of the Advisers Act as well as Rule 206(4)-7 thereunder and that Correnti aided and abetted in the firm's violations.Without admitting or denying the SEC's findings, CapitalWorks and Correnti settled the charges brought by the SEC by agreeing to a censure, a cease-and-desist order and civil penalties of $40,000 and $25,000, respectively, among other sanctions.

9 In the Matter of CapitalWorks Investment Partners, LLC and Mark J. Correnti, IA Release No. 2520 (June 6, 2006).

10 In the Matter of Morgan Stanley & Co.Inc. and Morgan Stanley DW Inc., IA Release No. 2526 (June 27, 2006).

In the Matter of CapitalWorks Investment Partners LLC and Mark J. Correnti, IA-2520 (June 6, 2006)